South Carolina General Assembly
114th Session, 2001-2002
Journal of the House of Representatives


Printed Page 2917 . . . . . Thursday, May 3, 2001

Thursday, May 3, 2001
(Statewide Session)

Indicates Matter Stricken
Indicates New Matter

The House assembled at 10:00 a.m.
Deliberations were opened with prayer by Rep. RICE as follows:

Almighty God, Ruler of all men and of all nations, at this altar of prayer we pause to renew our vows to serve our fellowmen and in serving them to serve our Heavenly Father. May this place be a symbol of freedom and justice, of uprightness and truth to be matched by the quality of our service. Fill our hearts with thankfulness and our minds with wisdom. Make us good workmen, upholding what is right, correcting what is wrong, always striving to do Your will. May goodness, charity and understanding abide with us now and remain with us as we travel the journey of life. Amen.

Pursuant to Rule 6.3, the House of Representatives was led in the Pledge of Allegiance to the Flag of the United States of America by the SPEAKER.

After corrections to the Journal of the proceedings of yesterday, the SPEAKER ordered it confirmed.

MOTION ADOPTED

Rep. BARFIELD moved that when the House adjourns, it adjourn in memory of Stephen Kendal Shelly, which was agreed to.

REGULATIONS RECEIVED

The following were received and referred to the appropriate committees for consideration:

Document No. 2618
Agency: Department of Natural Resources
Statutory Authority: 1976 Code Section 50-11-2200
Hunt Units and Wildlife Management Area Regulations
Received by Speaker of the House of Representatives
May 2, 2001


Printed Page 2918 . . . . . Thursday, May 3, 2001

Referred to Agriculture, Natural Resources and Environmental Affairs Committee
Legislative Review Expiration August 30, 2001 (Subject to Sine Die Revision)

Document No. 2621
Agency: Department of Labor, Licensing and Regulation Manufactured Housing Board
Statutory Authority: 1976 Code Sections 40-1-50, 40-29-50 and 40-29-100
Retail Managers; Finance Managers
Received by Speaker of the House of Representatives
May 2, 2001
Referred to Labor, Commerce and Industry Committee
Legislative Review Expiration August 30, 2001 (Subject to Sine Die Revision)

Document No. 2613
Agency: Board of Education
Statutory Authority: 1976 Code Sections 59-5-60, 59-1-445, 59-18-310, 59-18-320, 59-18-330, 59-20-60(4)(c), 59-18-340, and 59-30-10
Testing Programs (New Title: Assessment Program)
Received by Speaker of the House of Representatives
May 2, 2001
Referred to Education and Public Works Committee
Legislative Review Expiration August 30, 2001 (Subject to Sine Die Revision)

REPORTS OF STANDING COMMITTEES

Rep. FLEMING, from the Committee on Invitations and Memorial Resolutions, submitted a favorable report on:

H. 3945 (Word version) -- Rep. Hayes: A CONCURRENT RESOLUTION TO REQUEST THE DEPARTMENT OF TRANSPORTATION TO RENAME "SCOTT ROAD" IN THE TOWN OF LAKE VIEW IN DILLON COUNTY "STEPHEN DAVID SCOTT ROAD" TO HONOR MR. STEPHEN DAVID SCOTT, A DISTINGUISHED DILLON COUNTY EDUCATOR, AND TO INSTALL APPROPRIATE MARKERS OR SIGNS ALONG THE ROAD CONTAINING THE WORDS "STEPHEN DAVID SCOTT ROAD".
Ordered for consideration tomorrow.


Printed Page 2919 . . . . . Thursday, May 3, 2001

Rep. TOWNSEND, from the Committee on Education and Public Works, submitted a favorable report on:

H. 3768 (Word version) -- Rep. Askins: A BILL TO AMEND SECTION 56-3-120, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO EXEMPTIONS FROM MOTOR VEHICLE REGISTRATION AND LICENSING REQUIREMENTS, SO AS TO EXEMPT CERTAIN FIREFIGHTING VEHICLES.
Ordered for consideration tomorrow.

Rep. TOWNSEND, from the Committee on Education and Public Works, submitted a favorable report with amendments on:

H. 3907 (Word version) -- Rep. Townsend: A BILL TO AMEND SECTION 56-5-4170, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE TENDER OR INTERCHANGE OF AN INTERMODAL TRAILER, CHASSIS, OR CONTAINER, SO AS TO MAKE TECHNICAL CHANGES, PROVIDE THAT IF THE EQUIPMENT PROVIDER FOR CERTAIN OUT-OF-SERVICE VEHICLES FAILS TO REIMBURSE THE MOTOR CARRIER OPERATOR FOR FINES AND PENALTIES INCURRED PURSUANT TO THE VEHICLE'S OUT-OF-SERVICE ORDER WITHIN THIRTY DAYS OF A CONVICTION FOR VIOLATING A ROADSIDE INSPECTION, THEN THE MOTOR CARRIER OPERATOR HAS A CIVIL CAUSE OF ACTION AGAINST THE EQUIPMENT PROVIDER, TO PROVIDE THAT THE PROVISIONS CONTAINED IN THIS SECTION ARE INTENDED TO ELIMINATE THE RESPONSIBILITY AND OBLIGATION OF A MOTOR CARRIER AND OPERATOR TO MAINTAIN AND OPERATE VEHICLES IN ACCORDANCE WITH FEDERAL MOTOR CARRIER SAFETY REGULATIONS AND ALL STATE AND LOCAL LAWS, AND TO PROVIDE THAT ANY PROVISION CONTAINED IN AN INTERMODAL INTERCHARGE CONTRACT PROVIDING FOR A HOLD HARMLESS OR INDEMNITY AGREEMENT, OR BOTH, BETWEEN THE MOTOR CARRIER OPERATOR AND THE TENDERER OR OWNER OF A VEHICLE, CONTRARY TO ANY PROVISION OF THIS SECTION IS VOID.
Ordered for consideration tomorrow.


Printed Page 2920 . . . . . Thursday, May 3, 2001

Rep. TOWNSEND, from the Committee on Education and Public Works, submitted a favorable report with amendments on:

S. 187 (Word version) -- Senators Rankin, Short and Hutto: A BILL TO AMEND SECTION 56-5-6410, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE USE OF A CHILD PASSENGER RESTRAINT SYSTEM IN A MOTOR VEHICLE THAT TRANSPORTS A CHILD UNDER SIX YEARS OF AGE, SO AS TO PROVIDE THAT A CHILD FOUR YEARS OF AGE OR MORE WHO CANNOT SIT WITH THEIR BACKS STRAIGHT AGAINST THE VEHICLE SEAT BACK CUSHION WITH KNEES BENT OVER A VEHICLE'S SEAT EDGE MUST BE SECURED BY A BELT-POSITIONING BOOSTER SEAT PRESCRIBED BY THE NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION.
Ordered for consideration tomorrow.

Rep. TOWNSEND, from the Committee on Education and Public Works, submitted a favorable report with amendments on:

S. 384 (Word version) -- Senators Verdin, Branton, Ryberg, Patterson and Ritchie: A BILL TO AMEND SECTION 56-3-630, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE DEPARTMENT OF PUBLIC SAFETY CLASSIFYING CERTAIN MOTOR VEHICLES AS PRIVATE PASSENGER MOTOR VEHICLES, SO AS TO REVISE THE MAXIMUM EMPTY WEIGHT OF A TRUCK THAT THE DEPARTMENT SHALL CLASSIFY AS A PRIVATE PASSENGER MOTOR VEHICLE.
Ordered for consideration tomorrow.

Rep. TOWNSEND, from the Committee on Education and Public Works, submitted a favorable report with amendments on:

S. 495 (Word version) -- Senators Wilson, Verdin and McConnell: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 56-3-1265 SO AS TO PROVIDE THAT THE DEPARTMENT OF PUBLIC SAFETY MUST DISPLAY IN ALL DIVISION OF MOTOR VEHICLE OFFICES WHERE MOTOR VEHICLE LICENSE PLATES OR STICKERS MAY BE OBTAINED OR RENEWED EXAMPLES OF ALL TYPES OF SPECIAL


Printed Page 2921 . . . . . Thursday, May 3, 2001

LICENSE PLATES WHICH INDIVIDUALS OF A PARTICULAR GROUP MAY OBTAIN, AND TO PROVIDE EXCEPTIONS.
Ordered for consideration tomorrow.

Rep. TOWNSEND, from the Committee on Education and Public Works, submitted a favorable report with amendments on:

H. 3034 (Word version) -- Rep. Lucas: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 59-104-25 SO AS TO ESTABLISH CRITERIA FOR THE AWARDING OF PALMETTO FELLOWS SCHOLARSHIPS TO STUDENTS GRADUATING IN 2001 AND THEREAFTER WHO ATTEND "MAGNET SCHOOLS" OR SCHOOLS WITH "OPEN ENROLLMENT".
Ordered for consideration tomorrow.

Rep. CATO, from the Committee on Labor, Commerce and Industry, submitted a favorable report with amendments on:

H. 3974 (Word version) -- Rep. Cato: A BILL TO AMEND SECTION 37-17-10, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO REGULATION OF PERSONS WHO SELL PRESCRIPTION DRUG DISCOUNT CARDS, SO AS TO PROVIDE THAT SUCH PERSONS MUST REGISTER AND REPORT TO THE DEPARTMENT OF CONSUMER AFFAIRS, RATHER THAN TO THE DEPARTMENT OF INSURANCE; TO AMEND SECTION 38-5-80, AS AMENDED, RELATING TO REQUIREMENTS TO OBTAIN A LICENSE TO CONDUCT INSURANCE BUSINESS IN THIS STATE, SO AS TO CLARIFY WHAT BOOKS AND RECORDS OF AN INSURER MUST BE MAINTAINED IN THIS STATE; TO AMEND SECTION 38-31-20, AS AMENDED, RELATING TO DEFINITIONS IN THE SOUTH CAROLINA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION ACT, SO AS TO INCLUDE NEW DEFINITIONS AND REVISE CERTAIN EXISTING DEFINITIONS; TO AMEND SECTION 38-31-60, RELATING TO THE POWERS AND DUTIES OF THE SOUTH CAROLINA PROPERTY AND CASUALTY GUARANTY ASSOCIATION, SO AS TO PROVIDE THAT THE ASSOCIATION'S OBLIGATION TO AN INSURED CEASES WHEN TEN MILLION DOLLARS HAS BEEN PAID TO OR ON BEHALF OF THE INSURED AND TO ALLOW FOR ALLOCATION OF PAYMENTS WHEN THERE IS MORE THAN


Printed Page 2922 . . . . . Thursday, May 3, 2001

ONE CLAIMANT WITH A COVERED CLAIM; TO AMEND SECTION 38-31-70, AS AMENDED, RELATING TO THE PLAN OF OPERATION FOR THE ADMINISTRATION OF THE GUARANTY ASSOCIATION, SO AS TO AUTHORIZE REPORTING AND THE DELEGATION OF CERTAIN AUTHORITY TO AN ASSOCIATION SIMILAR TO THE GUARANTY ASSOCIATION; TO AMEND SECTION 38-31-90, AS AMENDED, RELATING TO RIGHTS OF THE GUARANTY ASSOCIATION REGARDING CLAIMANTS PAID AND ASSETS OF INSOLVENT INSURERS, SO AS TO PROVIDE THAT THE ASSOCIATION HAS THE RIGHT TO RECOVER THE AMOUNT OF A CLAIM PAID FROM CERTAIN INSUREDS AND AFFILIATES OF AN INSOLVENT INSURER; TO AMEND SECTION 38-31-100, AS AMENDED, RELATING TO PROCEDURES REQUIRED TO BE FOLLOWED BY PERSONS ASSERTING CLAIMS AND TO LIMITATIONS ON CLAIMS, SO AS TO REVISE THESE PROVISIONS; TO AMEND SECTION 38-39-90, AS AMENDED, RELATING TO CANCELLATION OF INSURANCE CONTRACTS BY PREMIUM SERVICE COMPANIES AND THE CREDITING OF RETURN PREMIUMS WHICH RESULT IN A SURPLUS, SO AS TO ALLOW A REFUND OF SURPLUS TO AN AGENT OF AN INSURED AND TO PROVIDE THAT NO REFUND IS REQUIRED IF IT AMOUNTS TO LESS THAN FIVE DOLLARS, RATHER THAN THREE DOLLARS; TO AMEND SECTION 38-43-80, AS AMENDED, RELATING TO LICENSE FEES FOR AGENTS OF INSURERS, SO AS TO PROVIDE THAT FEES MUST BE PAID AS PRESCRIBED BY THE DEPARTMENT, RATHER THAN PAID IN ADVANCE; TO AMEND SECTION 38-55-30, AS AMENDED, RELATING TO THE AMOUNT OF RISK THAT AN INSURER OR CAPTIVE INSURER MAY EXPOSE ITSELF TO, SO AS TO PROVIDE THAT THIS SECTION DOES NOT APPLY TO CAPTIVE INSURERS; TO AMEND SECTION 38-71-1370, AS AMENDED, RELATING TO THE APPLICATION OF GROUP ACCIDENT AND HEALTH INSURANCE PROVISIONS TO SMALL EMPLOYER INSURERS, SO AS TO EXCLUDE COVERAGE TO LATE ENROLLEES FOR A PERIOD OF TIME; TO AMEND SECTION 38-71-1980, RELATING TO EXPEDITED EXTERNAL REVIEWS, SO AS TO CHANGE AN INTERNAL CROSS REFERENCE; TO AMEND SECTION 38-87-40, AS AMENDED, RELATING TO REQUIREMENTS FOR OUT-OF-STATE CHARTERED RISK

Printed Page 2923 . . . . . Thursday, May 3, 2001

RETENTION GROUPS TO DO BUSINESS IN SOUTH CAROLINA, SO AS TO PROVIDE THAT SUCH GROUP IS SUBJECT TO TAXATION AS AN ADMITTED INSURER WOULD BE, RATHER THAN AS A FOREIGN ADMITTED INSURER WOULD BE; TO AMEND SECTION 38-90-60, RELATING TO INCORPORATION OPTIONS AND REQUIREMENTS FOR CAPTIVE INSURANCE COMPANIES, SO AS TO CHANGE A CROSS REFERENCE; TO AMEND SECTION 38-90-140, RELATING TO TAX PAYMENTS BY CAPTIVE INSURANCE COMPANIES, SO AS TO PROVIDE THAT THESE TAXES MUST BE PAID TO THE DEPARTMENT OF INSURANCE RATHER THAN TO THE DIRECTOR OF THE DEPARTMENT; TO AMEND SECTION 38-90-180, RELATING TO THE APPLICATION OF CERTAIN PROVISIONS OF THE REHABILITATION AND LIQUIDATION ACT TO CAPTIVE INSURANCE COMPANIES, SO AS TO ALSO APPLY CERTAIN PROVISIONS OF THE ADMINISTRATIVE SUPERVISION OF INSURERS ACT TO THESE COMPANIES; TO AMEND SECTION 56-10-240, AS AMENDED, RELATING TO PROCEDURES THAT MOTOR VEHICLE INSUREDS AND INSURERS MUST FOLLOW IF A MOTOR VEHICLE SUBJECT TO FINANCIAL RESPONSIBILITY REQUIREMENTS BECOMES UNINSURED, SO AS TO PROVIDE THAT NOTICE MUST BE GIVEN TO THE DEPARTMENT OF INSURANCE IF THE LAPSE OR TERMINATION OCCURRED WITHIN THREE MONTHS OF THE ISSUANCE OF A NEW POLICY; AND TO AMEND SECTION 56-10-280, AS AMENDED, RELATING TO THE MINIMUM DURATION OF INSURANCE ISSUED TO MEET MOTOR VEHICLE FINANCIAL RESPONSIBILITY REQUIREMENTS, SO AS TO PROVIDE THAT IF A CHECK TENDERED BY THE INSURED IS RETURNED FOR INSUFFICIENT FUNDS, THE CANCELLATION IS EFFECTIVE AS OF THE POLICY INCEPTION OR RENEWAL DATE.
Ordered for consideration tomorrow.

HOUSE RESOLUTION

On motion of Rep. FLEMING, with unanimous consent, the following was taken up for immediate consideration:

H. 4056 (Word version) -- Rep. Fleming: A HOUSE RESOLUTION EXTENDING THE PRIVILEGE OF THE FLOOR OF THE SOUTH CAROLINA HOUSE OF REPRESENTATIVES TO THE PLAYERS, COACHES,


Printed Page 2924 . . . . . Thursday, May 3, 2001

AND STAFF OF THE UNION HIGH SCHOOL FOOTBALL TEAM ON THURSDAY, MAY 10, 2001, AT A TIME TO BE DETERMINED BY THE SPEAKER FOR THE PURPOSE OF RECOGNIZING AND CONGRATULATING THEM ON WINNING THE 2000 CLASS AAA FOOTBALL STATE CHAMPIONSHIP.

Be it resolved by the House of Representatives:

That the members of the House of Representatives hereby extend the privilege of the floor of the South Carolina House of Representatives to the players, coaches, and staff of the Union High School Football team on Thursday, May 10, 2001, at a time to be determined by the Speaker for the purpose of recognizing and congratulating them on winning the 2000 Class AAA Football State Championship.

The Resolution was adopted.

CONCURRENT RESOLUTION

The following was introduced:

H. 4057 (Word version) -- Rep. Fleming: A CONCURRENT RESOLUTION TO COMMEND THE UNION HIGH SCHOOL "YELLOW JACKETS" FOOTBALL TEAM ON A TREMENDOUS SEASON OF SPIRITED COMPETITION AND CONGRATULATE THE "YELLOW JACKETS" ON WINNING THE 2000 SOUTH CAROLINA STATE CLASS AAA FOOTBALL CHAMPIONSHIP AND THEIR SECOND CONSECUTIVE STATE FOOTBALL CHAMPIONSHIP.

The Concurrent Resolution was agreed to and ordered sent to the Senate.

INTRODUCTION OF BILLS

The following Bills and Joint Resolutions were introduced, read the first time, and referred to appropriate committees:

H. 4058 (Word version) -- Rep. Harrison: A BILL TO AMEND SECTION 20-7-420, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO FAMILY COURT JURISDICTION, SO AS TO PROVIDE THE COURT HAS AUTHORITY TO ASSESS


Printed Page 2925 . . . . . Thursday, May 3, 2001

REASONABLE COURT COSTS WHEN A PERSON IS CHARGED WITH THE FAILURE TO OBEY A COURT ORDER.
Referred to Committee on Judiciary

H. 4059 (Word version) -- Rep. Harrison: A BILL TO AMEND SECTION 2-17-90, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ACTS PROHIBITED OF LOBBYISTS' PRINCIPALS, SO AS TO ADD AN EXCEPTION FOR THE COST OF FOOD AND BEVERAGES FOR PUBLIC EMPLOYEES ATTENDING A FEDERALLY MANDATED TRAINING PROGRAM.
Referred to Committee on Judiciary

H. 4060 (Word version) -- Reps. Limehouse, Harrell, Ott, Owens, Scarborough and D. C. Smith: A BILL TO AMEND SECTION 50-5-1705, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CATCH LIMITS FOR RED DRUM AND CERTAIN OTHER FISH, SO AS TO CHANGE THE CATCH LIMIT FOR RED DRUM FROM FIVE FISH IN POSSESSION PER DAY TO ONE FISH IN POSSESSION PER DAY; AND TO AMEND SECTION 50-5-1710, RELATING TO SIZE LIMITS FOR RED DRUM AND CERTAIN OTHER FISH, SO AS TO CHANGE THE MINIMUM SIZE LIMIT FOR RED DRUM FROM FOURTEEN INCHES TO SEVENTEEN INCHES AND PROVIDE THAT IT IS UNLAWFUL TO TAKE RED DRUM OF LESS THAN SEVENTEEN INCHES IN TOTAL LENGTH, OR MORE THAN TWENTY-SEVEN INCHES IN TOTAL LENGTH.
Referred to Committee on Agriculture, Natural Resources and Environmental Affairs

H. 4061 (Word version) -- Reps. Thompson, Bingham, Cooper, Martin, Robinson, Scarborough, Stille, Trotter, Webb and White: A BILL TO AMEND SECTION 7-25-180, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE UNLAWFUL DISTRIBUTION OF CAMPAIGN LITERATURE AT A POLLING PLACE ON ELECTION DAY, SO AS TO MAKE IT UNLAWFUL TO CONDUCT AN EXIT POLL WITHIN TWO HUNDRED FEET OF A POLLING PLACE.
Referred to Committee on Judiciary

H. 4062 (Word version) -- Rep. Hayes: A JOINT RESOLUTION TO PROVIDE FOR AN INCREASE IN THE LEVY OF TAXES FOR SCHOOL


Printed Page 2926 . . . . . Thursday, May 3, 2001

PURPOSES IN DILLON COUNTY FOR THE FISCAL YEAR BEGINNING JULY 1, 2001, AND ENDING JUNE 30, 2002.
On motion of Rep. HAYES, with unanimous consent, the Joint Resolution was ordered placed on the Calendar without reference.

H. 4063 (Word version) -- Education and Public Works Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE DEPARTMENT OF EDUCATION, RELATING TO PRINCIPAL EVALUATION PROGRAM, DESIGNATED AS REGULATION DOCUMENT NUMBER 2558, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.
Without Reference

H. 4064 (Word version) -- Education and Public Works Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE BOARD OF EDUCATION, RELATING TO REQUIREMENTS FOR ADDITIONAL AREAS OF CERTIFICATION, DESIGNATED AS REGULATION DOCUMENT NUMBER 2567, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.
Without Reference

H. 4065 (Word version) -- Education and Public Works Committee: A JOINT RESOLUTION TO APPROVE REGULATIONS OF THE BOARD OF EDUCATION, RELATING TO TYPES AND LEVELS OF CREDENTIAL CLASSIFICATION, DESIGNATED AS REGULATION DOCUMENT NUMBER 2569, PURSUANT TO THE PROVISIONS OF ARTICLE 1, CHAPTER 23, TITLE 1 OF THE 1976 CODE.
Without Reference

CONCURRENT RESOLUTION

The following was introduced:

H. 4066 (Word version) -- Reps. Stuart, Harrison and Allison: A CONCURRENT RESOLUTION TO COMMEND DONALD C. CAPPS OF COLUMBIA, PRESIDENT EMERITUS OF THE NATIONAL FEDERATION OF THE BLIND OF SOUTH CAROLINA, FOR THE INVALUABLE CONTRIBUTIONS HE HAS MADE OVER THE LAST FORTY-FIVE YEARS IN AIDING THE BLIND CITIZENS OF SOUTH CAROLINA AND THE NATION, AND TO


Printed Page 2927 . . . . . Thursday, May 3, 2001

CONGRATULATE HIM ON RECEIVING AN HONORARY DOCTOR OF LETTERS FROM USC SPARTANBURG.

The Concurrent Resolution was agreed to and ordered sent to the Senate.

HOUSE RESOLUTION

The following was introduced:

H. 4067 (Word version) -- Reps. Thompson, Cooper, Martin, Stille, Townsend and White: A HOUSE RESOLUTION TO HONOR AND PAY TRIBUTE TO THE EXTRAORDINARY LIFE AND PUBLIC SERVICE OF OUR FRIEND AND FORMER COLLEAGUE, THE HONORABLE PATRICK BRADLEY HARRIS OF ANDERSON COUNTY.

Whereas, the members of the House of Representatives of the State of South Carolina are pleased to welcome one of its former members upon his visit to the State House and to thank him for his works to better the Palmetto State and Anderson County; and

Whereas, the Honorable Patrick Bradley Harris, affectionately known as "Mr. Pat", served as an esteemed member of the House of Representatives continuously for twenty-seven years; and

Whereas, "Mr. Pat" was born in Anderson, South Carolina, and graduated from Anderson County schools, and attended Presbyterian College. "Mr. Pat" resides in Anderson with his wife, the former Elizabeth Orr of Edgemoor, and they have one son, Patrick B. Harris, Jr.; and

Whereas, Representative Harris first began his life in politics in 1964 upon his election to the Anderson City Council and was elected in 1969 to serve Anderson County, which he did while earning the respect and receiving the affection of his many colleagues, constituents, and friends over the years; and

Whereas, throughout his tenure in the General Assembly, he championed the cause of the mentally ill and the handicapped and was also a strong voice for sound fiscal policies through his service as Chairman of the Joint Appropriation Review Committee and as a senior member of the House Ways and Means Committee; and


Printed Page 2928 . . . . . Thursday, May 3, 2001

Whereas, as a great testament to his personal integrity and character he served as Chairman of the House Ethics Committee, a position through which he brought credit not only upon himself but upon the House as well during the years he served on this committee; and

Whereas, "Mr. Pat" was and still continues to be an inspiration to all of his friends and former colleagues, a great source of wisdom always expressed with gentle wit, and an example of a true moral gentleman; and

Whereas, Pat Harris embodies the best of what a public official should be and his friends and former colleagues in the House of Representatives find it fitting to pause in their deliberations to honor this distinguished South Carolinian for his efforts and service to this great State and to Anderson County. Now, therefore,

Be it resolved by the House of Representatives:

That the members of the House of Representatives of the State of South Carolina hereby honor and pay tribute to the extraordinary life and public service of our friend and former colleague, the Honorable Patrick B. Harris of Anderson County.

Be it further resolved that a copy of this resolution be presented to the Honorable Patrick B. Harris.

The Resolution was adopted.

ROLL CALL

The roll call of the House of Representatives was taken resulting as follows:

Allen                  Allison                Altman
Bales                  Barfield               Barrett
Battle                 Bingham                Bowers
Breeland               Brown, G.              Brown, J.
Brown, R.              Campsen                Carnell
Cato                   Chellis                Clyburn
Coates                 Coleman                Cooper
Dantzler               Davenport              Delleney
Easterday              Edge                   Emory
Fleming                Freeman                Frye

Printed Page 2929 . . . . . Thursday, May 3, 2001

Gilham                 Gourdine               Govan
Hamilton               Harrell                Harrison
Harvin                 Haskins                Hayes
Hines, J.              Hines, M.              Hinson
Hosey                  Howard                 Huggins
Jennings               Keegan                 Kelley
Kennedy                Kirsh                  Klauber
Knotts                 Koon                   Law
Leach                  Lee                    Limehouse
Littlejohn             Lloyd                  Loftis
Lourie                 Lucas                  Mack
Martin                 McCraw                 McGee
McLeod                 Merrill                Miller
Moody-Lawrence         Neal, J.H.             Neal, J.M.
Ott                    Owens                  Parks
Perry                  Phillips               Quinn
Rhoad                  Rice                   Riser
Rivers                 Robinson               Rodgers
Rutherford             Sandifer               Scarborough
Scott                  Sharpe                 Sheheen
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.E.            Smith, J.R.
Smith, W.D.            Snow                   Stille
Stuart                 Talley                 Taylor
Thompson               Townsend               Tripp
Trotter                Vaughn                 Walker
Webb                   Weeks                  Whatley
Whipper                White                  Wilder
Wilkins                Young, A.              Young, J.

STATEMENT OF ATTENDANCE

I came in after the roll call and was present for the Session on Thursday, May 3.

Harry Askins                      Bill Cotty
Fletcher Smith                    Gilda Cobb-Hunter

Total Present--121

LEAVE OF ABSENCE

The SPEAKER granted Rep. MEACHAM-RICHARDSON a leave of absence for the day due to a death in the family.


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SPECIAL PRESENTATION

Rep. MOODY-LAWRENCE and the York Delegation presented to the House the Winthrop University Men's Basketball Team, the 2000-2001 National Collegiate Athletic Association's Champions.

SPECIAL PRESENTATION

Reps. COATES and MCGEE presented to the House the Florence Christian School Boys Basketball Team, the South Carolina Independent School Association Class AA Champions, their coaches and other school officials.

CO-SPONSOR ADDED

In accordance with House Rule 5.2 below:
"5.2   Every bill before presentation shall have its title endorsed; every report, its title at length; every petition, memorial, or other paper, its prayer or substance; and, in every instance, the name of the member presenting any paper shall be endorsed and the papers shall be presented by the member to the Speaker at the desk. After a bill or resolution has been presented and given first reading, no further names of co-sponsors may be added. A member may add his name to a bill or resolution or a co-sponsor of a bill or resolution may remove his name at any time prior to the bill or resolution receiving passage on second reading. The member or co-sponsor shall notify the Clerk of the House in writing of his desire to have his name added or removed from the bill or resolution. The Clerk of the House shall print the member's or co-sponsor's written notification in the House Journal. The removal or addition of a name does not apply to a bill or resolution sponsored by a committee."

CO-SPONSOR ADDED

Bill Number:   H. 3937 (Word version)
Date:   ADD:
05/03/01   TALLEY

RECORD FOR VOTING

I voted in the affirmative for Bill H. 3307, as amended, although I am opposed to the lottery. I felt H. 3307, as amended, was the best opportunity we have to mitigate the harm a lottery would bring to our State.

Rep. Gloria Haskins


Printed Page 2931 . . . . . Thursday, May 3, 2001

H. 3307-RECORD FOR VOTING

After much internal struggle and deliberation, I voted to adopt the Ways and Means House Bill H. 3307 as amended, because procedurally I thought this was necessary to make the lottery a tightly regulated industry. The vote today was a procedural game played by the liberals who want a loose free-for-all lottery. I have always voted against the lottery because I think it is bad public policy for our State that will hurt our citizens. I have fought the referendum change to the constitution as well as voting against ratification. However, the vote today was not about adopting a lottery which I do not support, but whether we would have a tightly regulated Bill controlling this industry. I do not support a State run lottery, but if we are going to have a lottery, I think it should be controlled by our State, not an outside business skimming millions of dollars off the top. This version adopts language that strongly controls the lottery (not as tightly as I would like it but better than what the Governor or Senate proposed) and therefore, I deemed it better to adopt this Bill than vote against it. A vote against this Bill would not keep the lottery out of South Carolina; if it could have, I would have voted against it.

Rep. Mike Easterday     Rep. Glenn Hamilton

Rep. Phil Sinclair

RECORD FOR VOTING

I support protecting our children from pornography in public libraries by installing Internet filters that screen out pornographic material. On Amendment No. 139 by Rep. W.D. Smith I voted to table the amendment because spending lottery monies on public libraries violates South Carolina constitutional provisions that mandate all these funds be spent on education.

Rep. David J. Owens

STATEMENT FOR THE JOURNAL

I have been one of the strongest opponents of the lottery in the General Assembly. I voted against removing the constitutional prohibition against lotteries in 1999. In 2000, I made numerous speeches against the lottery, and participated in several debates about the lottery during the months preceding the lottery referendum.

Since losing the lottery referendum, my goal has been to diminish the negative aspects of a lottery that caused me to oppose it in the first place. I voted for the lottery enabling legislation (H. 3307), as amended


Printed Page 2932 . . . . . Thursday, May 3, 2001

by the House on May 3, 2001, because it met many of the criteria that I consider essential for the negative aspects of a lottery to be diminished.

Rep. Chip Campsen

ORDERED ENROLLED FOR RATIFICATION

The following Bill and Joint Resolution were read the third time, passed and, having received three readings in both Houses, it was ordered that the title of each be changed to that of an Act, and that they be enrolled for ratification:

S. 579 (Word version) -- Senator Elliott: A BILL TO PROVIDE FOR PAYMENT OF AN ADDITIONAL ANNUAL PER DIEM FOR THE CHAIRMAN OF THE DILLON COUNTY TRANSPORTATION COMMITTEE.

S. 624 (Word version) -- Senator J. V. Smith: A JOINT RESOLUTION TO REDUCE FROM EIGHT HUNDRED EIGHTY DOLLARS TO EIGHT HUNDRED SEVENTEEN DOLLARS THE ANNUAL FEE FOR THE AUTOMOBILE MANUFACTURED STANDARD LICENSE PLATE FOR VEHICLES IN ITS EMPLOYEE BENEFIT PROGRAM AND FOR THE TESTING, DISTRIBUTION, EVALUATION, AND PROMOTION OF ITS VEHICLES, TO LIMIT THE REDUCED FEE TO APPLICATIONS FILED IN 2002, AND TO PROPORTIONATELY REDUCE THE ALLOCATIONS OF THIS FEE REVENUE.

SENT TO THE SENATE

The following Bill was taken up, read the third time, and ordered sent to the Senate:

H. 4018 (Word version) -- Reps. Stille, Carnell, Townsend and Klauber: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 1-1-709 SO AS TO DESIGNATE THE HISTORIC ABBEVILLE OPERA HOUSE IN ABBEVILLE, SOUTH CAROLINA, AS THE OFFICIAL STATE RURAL DRAMA THEATER.


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H. 3822--DEBATE ADJOURNED

Rep. CATO moved to adjourn debate upon the following Bill until Tuesday, May 8, which was adopted:

H. 3822 (Word version) -- Reps. Cato, Tripp, Bales, Barfield, Edge, Limehouse, McCraw, Meacham-Richardson, Merrill, Robinson, Sandifer, Scott and Whatley: A BILL TO AMEND CHAPTER 77, TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO AUTOMOBILE INSURANCE, BY ADDING ARTICLE 12 SO AS TO PROVIDE THE DIRECTOR OF THE DEPARTMENT OF INSURANCE THE AUTHORITY TO ISSUE TO A RENTAL COMPANY A LIMITED LICENSE WHICH AUTHORIZES THE COMPANY TO OFFER OR SELL INSURANCE IN CONNECTION WITH THE RENTAL OF A MOTOR VEHICLE.

S. 537--POINT OF ORDER

The following Bill was taken up:

S. 537 (Word version) -- Banking and Insurance Committee: A BILL TO AMEND TITLE 38, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO INSURANCE, BY ADDING SECTION 38-90-25 SO AS TO PROVIDE FOR A CAPTIVE REINSURANCE COMPANY TO BE LICENSED TO WRITE REINSURANCE CONTRACTS IN SOUTH CAROLINA; BY ADDING SECTION 38-90-45 SO AS TO PROVIDE FOR MINIMUM CAPITALIZATION OR RESERVES FOR LICENSING OF A CAPTIVE REINSURANCE COMPANY; BY ADDING SECTION 38-90-55 SO AS TO REQUIRE THE INCORPORATION OF A CAPTIVE REINSURANCE COMPANY AS A STOCK INSURER; BY ADDING SECTION 38-90-75 SO AS TO PROVIDE FOR A CAPTIVE REINSURANCE COMPANY TO DISCOUNT ITS LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES; BY ADDING SECTION 38-90-145 SO AS TO PROVIDE FOR AN ANNUAL CAPTIVE REINSURANCE TAX OF FIVE THOUSAND DOLLARS; BY ADDING SECTION 38-90-185 SO AS TO PROVIDE FOR IN-STATE MANAGEMENT OF THE ASSETS OF A CAPTIVE REINSURANCE COMPANY; TO AMEND SECTION 38-90-10, RELATING TO DEFINITIONS FOR PURPOSES OF REGULATION OF CAPTIVE INSURANCE COMPANIES, SO AS TO PROVIDE DEFINITIONS FOR "CAPTIVE REINSURANCE COMPANY" AND CERTAIN ACCOUNTING TERMS; TO AMEND SECTION 38-90-70,


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RELATING TO FINANCIAL REPORTING TO THE DIRECTOR OF THE SOUTH CAROLINA DEPARTMENT OF INSURANCE, SO AS TO REQUIRE AN ANNUAL REPORT FROM A CAPTIVE REINSURANCE COMPANY; TO AMEND SECTION 38-90-220, RELATING TO SPONSORS OF CAPTIVE INSURANCE COMPANIES, SO AS TO REQUIRE STATE LICENSING OR AUTHORIZATION OR, IN THE ALTERNATIVE, A TRUST FUND SECURING LOSSES; TO AMEND SECTION 38-10-10, RELATING TO THE PURPOSES OF ESTABLISHING PROTECTED CELLS OF A DOMESTIC INSURER, SO AS TO INCLUDE A CAPTIVE INSURER; TO AMEND SECTION 38-10-20, RELATING TO DEFINITIONS FOR PURPOSES OF PROTECTED CELL INSURANCE COMPANIES, SO AS TO INCLUDE A CAPTIVE INSURER; AND TO AMEND SECTION 38-9-200, AS AMENDED, RELATING TO CREDIT ALLOWANCE FOR INSURANCE COMPANIES, SO AS TO PROHIBIT CREDIT FOR REINSURANCE BASED ON THE STATUS OF A CAPTIVE REINSURANCE COMPANY.

POINT OF ORDER

Rep. CATO made the Point of Order that the Bill was improperly before the House for consideration since its number and title have not been printed in the House Calendar at least one statewide legislative day prior to second reading.
The SPEAKER sustained the Point of Order.

S. 496--AMENDED AND ORDERED TO THIRD READING

The following Bill was taken up:

S. 496 (Word version) -- Judiciary Committee: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 57 TO TITLE 33, SO AS TO ENACT THE "SOUTH CAROLINA EDUCATION LOTTERY ACT"; TO PROVIDE FOR A STATE LOTTERY AND TO CREATE THE SOUTH CAROLINA EDUCATION LOTTERY CORPORATION TO CONDUCT THE STATE LOTTERY; TO PROVIDE FOR THE CORPORATION'S BOARD MEMBERSHIP, DUTIES, AND POWERS; TO PROVIDE FOR THE CREATION OF A LOTTERY RETAILERS ADVISORY COMMITTEE; TO PROVIDE FOR THE METHOD OF CONTRACTING WITH VENDORS AND RETAILERS; TO PROVIDE FOR THE SALE OF LOTTERY GAME TICKETS AND


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THE DISTRIBUTION OF PRIZES; TO PROVIDE FOR ALLOCATION OF LOTTERY PROCEEDS WHICH MUST BE USED FOR EDUCATIONAL PURPOSES AND PROGRAMS; TO PROVIDE CRIMINAL PENALTIES FOR SELLING A LOTTERY TICKET TO A MINOR, PURCHASING A LOTTERY TICKET AS A MINOR, AND DEFRAUDING OR OTHERWISE TAMPERING WITH THE LOTTERY OR MAKING MATERIAL REPRESENTATIONS IN AN APPLICATION OR REPORT IN CONNECTION WITH THE LOTTERY; TO CREATE A SOUTH CAROLINA EDUCATION LOTTERY OVERSIGHT COMMITTEE; TO PROVIDE FOR SET-OFF DEBT COLLECTION FROM PRIZE WINNINGS; TO ESTABLISH THE SOUTH CAROLINA EDUCATION LOTTERY ACCOUNT INTO WHICH THE NET PROCEEDS RECEIVED FROM THE STATE EDUCATION LOTTERY MUST BE DEPOSITED AND TO PROVIDE FOR SPECIFIED PURPOSES FOR THE PROCEEDS; TO AMEND SECTION 1-3-240, RELATING TO THE REMOVAL OF OFFICERS BY THE GOVERNOR UNDER CERTAIN CIRCUMSTANCES, SO AS TO ADD THE SOUTH CAROLINA EDUCATION LOTTERY CORPORATION TO THAT PROVISION; TO ADD SECTION 2-15-63, SO AS TO PROVIDE THAT BEGINNING IN DECEMBER 2004 AND EVERY THREE YEARS THEREAFTER, THE LEGISLATIVE AUDIT COUNCIL MUST CONDUCT A MANAGEMENT PERFORMANCE AUDIT OF THE LOTTERY CORPORATION; TO AMEND SECTION 12-36-2120, RELATING TO THE EXEMPTIONS FROM THE SALES TAX, SO AS TO INCLUDE THE SALE OF A LOTTERY TICKET; AND TO AMEND SECTION 59-63-210, RELATING TO THE GROUNDS FOR WHICH A STUDENT MAY BE EXPELLED, SO AS TO PROVIDE THAT NO STUDENT UNDER EIGHTEEN YEARS OF AGE WHO UNLAWFULLY PURCHASES A LOTTERY TICKET MAY BE EXPELLED FOR THAT REASON ONLY.

The Ways and Means Committee proposed the following Amendment No. 1 (Doc Name DKA\AMEND\4348MM01), which was adopted:
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION   1.   The General Assembly finds that:

(1)   net proceeds of lottery games conducted pursuant to this chapter must be used to support improvements and enhancements for


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educational purposes and programs as provided by the General Assembly and that the net proceeds must be used to supplement, not supplant, existing resources for educational purposes and programs;

(2)   lottery games are an entrepreneurial enterprise and that the State shall create an instrumentality of the State and public body, corporate and politic, known as the South Carolina Lottery Commission, with the comprehensive and extensive powers as generally exercised by commissions engaged in entrepreneurial pursuits;

(3)   lottery games must be operated and managed in a manner which ensures that the lottery is operated with integrity and dignity and free of political influence, maximizes the use of revenues, and provides continuing entertainment to the public;

(4)   the South Carolina Lottery Commission must be accountable to the General Assembly and to the public through a system of audits and reports; and

(5)   this act is not a bill appropriating money out of the State Treasury as contemplated by Section 21 of Article IV of the Constitution of this State and, therefore, is not subject to a line item or section objection or veto by the Governor. It is the intent of the General Assembly that this act merely specify the educational purposes and programs, and parameters, for funding by the General Assembly through the annual general appropriations bill or any bill appropriating monies for previous or current fiscal years.
SECTION   2.   Title 59 of the 1976 Code is amended by adding:

"CHAPTER 150
South Carolina Education Lottery Act

Section 59-150-10.   This chapter may be cited as the 'South Carolina Education Lottery Act'.

Section 59-150-20.   As used in this chapter:

(1)   'Administrative expenses' means operating expenses, excluding amounts set aside for prizes, regardless of whether the prizes are claimed, and excluding amounts held as a fidelity fund pursuant to Section 59-150-170.

(2)   'Board' means the Board of Commissioners of the South Carolina Lottery Commission.

(3)   'Commission' means the South Carolina Lottery Commission.

(4)   'Educational purposes and programs' means educational expenses and scholarships as defined in Section 59-150-350(C).


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(5)   'Executive director' means the Executive Director of the South Carolina Lottery Commission or his designee.

(6)   'Immediate family' means a person who is:

(a)   a spouse;

(b)   a child residing in the same household; or

(c)   claimed as a dependent for income tax purposes.

(7)   'Lottery', 'lotteries', 'lottery game', or 'lottery games' means a game of chance approved by the General Assembly and operated pursuant to this chapter including, but not limited to, instant tickets, on-line lottery games, drawing numbers, and lottery games using mechanical or electronic devices but excluding keno, pari-mutuel betting, and casino gambling as defined in this section. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, except a machine or device dispensing a lottery ticket, and 16-19-50. The access and use of an electronic or mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and their employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense anything other than lottery tickets.

As used in this item, 'casino gambling' means a location or business for the purpose of conducting unlawful gambling activities, but excluding the sale and purchase of lottery game tickets or shares; and 'pari-mutuel betting' means a method or system of wagering on actual races including races involving horses or dogs at tracks and the distribution of winnings by pools.

(8)   'Lottery retailer' means a person who sells lottery game tickets or shares on behalf of the South Carolina Lottery Commission pursuant to a contract.

(9)   'Lottery vendor' means a person who provides or proposes to provide goods or services to the South Carolina Lottery Commission pursuant to a procurement contract, but does not include an employee of the commission, a lottery retailer, or a state agency or instrumentality of the State. The term includes a corporation whose shares are traded publicly and which is the parent company of the contracting party in a procurement contract.

(10)   'Major procurement contract' means a gaming product or service costing in excess of seventy-five thousand dollars including, but not limited to, major advertising contracts, annuity contracts, prize payment agreements, consulting services, equipment, tickets, and other products and services unique to the South Carolina lottery but not


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including materials, supplies, equipment, and services common to the ordinary operations of a business.

(11)   'Member' or 'members' means a Commissioner or Commissioners of the Board of the South Carolina Lottery Commission.

(12)   'Minority business' means a business which meets the definition of a socially and economically disadvantaged small business as described in Article 21, Chapter 35, Title 11, specifically a small business concern which:

(a)   is at least fifty-one percent owned by one or more citizens of the United States who are determined to be socially and economically disadvantaged;

(b)   in the case of a concern which is a corporation, at least fifty-one percent of all classes of voting stock of such corporation is owned by an individual determined to be socially and economically disadvantaged; or

(c)   in the case of a concern which is a partnership, at least fifty-one percent of the partnership interest is owned by an individual or individuals determined to be socially and economically disadvantaged or whose management and daily business operations are controlled by individuals determined to be socially and economically disadvantaged. Those individuals must be involved in the daily management and operations of the business concerned.

'Small business' as used in this item means a business which meets the definition of a small business for purposes of the Small Business Administration, an agency of the United States.

(13)   'Net proceeds' means all revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery games, less operating expenses and prizes.

(14)   'Operating expenses' means all costs of doing business including, but not limited to, prizes, commissions, and other compensation paid to a lottery retailer, advertising and marketing costs, rental fees, personnel costs, capital costs, depreciation of property and equipment, funds for compulsive gambling education and treatment, amounts held in or paid from a fidelity fund pursuant to Section 59-150-170, and other operating costs, including funds to the Commission on Higher Education and the Administrative Law Judge Division toward their expenses incurred in performance of their duties pursuant to this chapter.

(15)   'Person' means an individual, corporation, partnership, unincorporated association, or other legal entity.


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(16)   'Prize' means an award, gift, or anything of value regardless of whether there are conditions or restrictions attached to its receipt.

(17)   'Proceeds' means all lottery revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery or received by the commission.

(18)   'Share' means intangible evidence of participation in a lottery game.

(19)   'Ticket' means tangible evidence issued by the South Carolina Lottery Commission to provide participation in a lottery game.

Section 59-150-30.   (A)   There is created a commission to be known as the South Carolina Lottery Commission, which is deemed to be a public commission and an instrumentality of the State. The commission and its employees are subject to the South Carolina Consolidated Procurement Code, South Carolina Administrative Procedures Act, South Carolina Ethics Reform Act, and South Carolina Freedom of Information Act. Venue for the commission is in Richland County.

(B)   Beginning in December 2004 and every three years after that, or by legislative request, the Legislative Audit Council shall conduct a management performance audit of the commission. The cost of this audit, up to one hundred thousand dollars, is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the management performance audit.

Section 59-150-40.   (A)   The commission is governed by a board composed of nine members to be appointed as follows: three members must be appointed by the Governor, three members must be appointed by the President Pro Tempore of the Senate, and three members must be appointed by the Speaker of the House of Representatives.

(B)   A member must:

(1)   be a resident of the State of South Carolina;

(2)   not have been convicted of a felony offense or bookmaking or other form of unlawful gambling. A background investigation must be conducted on each board nominee. The commission shall pay for the cost of the investigation and may contract with the State Law Enforcement Division (SLED) or appropriate federal agency for the performance of the investigation;

(3)   meet the qualifications for electors as provided in Section 7-5-120;


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(4)   not have been an elected public official, as provided in Section 24, Article III of the Constitution of this State and Section 2-1-100, for at least two years before appointment; and

(5)   have been screened by a panel pursuant to procedures it establishes and found by the panel to meet the statutory qualifications and considerations for appointment to the board. The Governor, Speaker of the House of Representatives, and the President Pro Tempore of the Senate each shall submit the names of his potential board appointees to the panel. If the panel finds the potential appointee meets or does not meet the statutory qualifications, it shall notify the appointing authority who submitted the name. A potential appointee found not statutorily qualified by the panel may not be appointed to the board. The screening panel is composed of ten members: five selected by the President Pro Tempore of the Senate and five selected by the Speaker of the House of Representatives. The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each select three members of their respective bodies and two members from the public to serve on the screening panel. The members of the panel serve four-year terms. The investigation and consideration by the panel of a potential appointee is limited to the statutory qualifications established pursuant to this chapter. A panel member may be removed upon unanimous vote of the appointing authorities, or for cause by his appointing authority for malfeasance, incompetency, conflict of interest, misconduct, persistent neglect of duty in office, or incapacity.

(C)   In making appointments to the board, the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives, as appropriate, shall consider legal, financial, accounting, and marketing experience and race, gender, and other demographics factors to ensure nondiscrimination, inclusion, and representation of all segments of the State to the greatest extent possible.

(D)   The members shall serve terms of three years, except that of the initial appointments the Governor shall appoint two members, each to serve a two-year term, and one member to serve a four-year term; the Speaker of the House of Representatives shall appoint three members, each to serve a two-year term, co-terminus with the Speaker; and the President Pro Tempore of the Senate shall appoint three members, each to serve an initial four-year term. A vacancy that occurs on the board must be filled by appointment by the Governor, the President Pro Tempore of the Senate, or the Speaker of the House of


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Representatives, as appropriate, for the remainder of the unexpired term.

(E)   A member shall not serve on the board if he is an officer or employee of the commission or if he has an immediate family member employed by the commission.

(F)   A member of the board may receive per diem, subsistence, and mileage at the rate provided by law for members of state boards, committees, and commissions.

(G)   The board shall elect from their membership officers of the board, including the chair.

(H)   The board may delegate to the executive director of the commission those powers and duties it considers proper.

(I)   A majority of members in office or at least five members, whichever is greater, constitutes a quorum for the transaction of business and for the exercise of a power or function of the commission.

(J)   Action may be taken and motions and resolutions adopted by the board at a board meeting by affirmative vote of a majority of present and voting board members. This subsection does not relieve the board from the requirements of the South Carolina Freedom of Information Act.

(K)   A vacancy in the membership of the board does not impair the right of the members to exercise all the powers and perform all the duties of the board.

(L)   A member is appointed to the board for a term and may be removed from the board before the expiration of his term only upon unanimous vote of the appointing authorities, or for cause by his appointing authority for malfeasance, incompetency, conflict of interest, misconduct, persistent neglect of duty in office, or incapacity.

(M)   A member of the board shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

Section 59-150-50.   The board shall:

(1)   approve, disapprove, amend, or modify the budget recommended by the executive director for the operation of the commission;

(2)   approve, disapprove, amend, or modify the terms of procurements recommended by the executive director;

(3)   hear appeals of hearings required by this chapter;


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(4)   promulgate regulations and adopt policies and procedures regulating the conduct of lottery games pursuant to the Administrative Procedures Act and as specified in Section 59-150-60(A)(19); and

(5)   perform other functions specified by this chapter.

Section 59-150-60.   (A)   The commission has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter which are not in conflict with the Constitution and laws of this State and which generally are exercised by commissions engaged in entrepreneurial pursuits on behalf of the State including, but not limited to, the powers to:

(1)   sue and be sued in contract and in tort and to complain and defend in all courts, subject to the South Carolina Tort Claims Act;

(2)   adopt and alter a corporate seal and symbol;

(3)   promulgate regulations and adopt policies and procedures for the regulation of its affairs and the conduct of its business; to elect and prescribe the duties of officers and employees of the commission; and to perform other matters as the commission may determine;

(4)   procure or to provide self-insurance;

(5)   hold copyrights, trademarks, and service marks and enforce its rights with respect to them;

(6)   organize, initiate, supervise, and administer the operation of the lottery as provided by this chapter and regulations promulgated and policies and procedures adopted pursuant to this chapter;

(7)   enter into written agreements with one or more other states for the operation, participation in marketing, and promotion of a joint lottery or joint lottery games;

(8)   conduct necessary or appropriate market research, which may include an analysis of the demographic characteristics of the players of the lottery game and an analysis of advertising, promotion, public relations, incentives, and other aspects of communication;

(9)   acquire or lease real property and make improvements on it and acquire by lease or by purchase personal property including, but not limited to, computers; mechanical, electronic, and on-line equipment and terminals; and intangible property including, but not limited to, computer programs, systems, and software. To achieve cost savings and efficiency, the commission shall use the telecommunications network service of the Budget and Control Board's Office of Information Resources pursuant to Sections 1-11-430 and 11-35-1580 provided that the commission certifies that the service is secure;


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(10)   administer oaths, take depositions, issue subpoenas, and compel the attendance of witnesses and the production of books, papers, documents, and other evidence relative to any investigation or proceeding conducted by the commission;

(11)   appoint, select, or hire officers, agents, and employees, including professional and administrative staff, personnel, and hearing officers to conduct hearings required by this chapter, and to fix their compensation and pay their expenses. Notwithstanding another provision of law, the commission has exclusive authority to contract for legal services. All employees of the commission are employees-at-will and are eligible for participation in the South Carolina Retirement System and may elect optional retirement program coverage in the same manner as provided in Section 9-20-10(2)(a), the State Health Insurance Group plans, and are encompassed by the South Carolina Tort Claims Act;

(12)   make pension payments to the South Carolina Retirement System or other system approved by the State Retirement System and pay contributions to the Office of Insurance Services for dental and health plans on behalf of personnel or employees employed by the commission who qualify in the same manner as other state employees in the executive branch of government;

(13)   select and contract with a lottery vendor and a lottery retailer;

(14)   enter into contracts or agreements with state or other law enforcement agencies for the performance of law enforcement, background investigations, and security checks;

(15)   enter into contracts on such terms and conditions as the commission may determine, except that the commission shall not enter into contracts to incur debt in its own name or enter into financing agreements with the State, agencies, or instrumentalities of the State, or with a commercial bank or credit provider; however, necessary start-up monies may be borrowed from the Insurance Reserve Fund of the Budget and Control Board, subject to the loan repayment terms of the Budget and Control Board, for effectuating its purpose, including payment of the initial expenses of initiation, administration, and operation of the commission and the lottery, if and only if sufficient start-up monies are not appropriated from the general fund;

(16)   enter into contracts of any type on the terms and conditions the commission determines, except that it may not enter into a contract with an entity for the purpose of having that entity assume or otherwise undertake the organization and conduct of the lottery;


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(17)   advertise and promote the lottery and lottery games in a dignified manner befitting the State, but only in compliance with the same state and federal standards of truth in advertising which govern private advertisers engaged in interstate commerce and including the restrictions described in this item. The board shall review, at least quarterly, all past lottery advertising and proposed concepts for major media campaigns to ensure that the advertising did not and does not target with the intent to exploit specific ethnic groups or economic classes of people, and that the content is accurate and not misleading. The commission shall promote fair and responsible play, including disclosure of the odds of winning, and shall ensure that any advertising used does not exhort the public to bet by misrepresenting, directly or indirectly, a person's chance of winning a prize. The commission may use interviews, pictures, or statements from people who have won lottery prizes to show that prizes are won and awarded. If the board finds that advertising conflicts with these policies, the board shall cause the cessation of that advertising.

Advertising and promotion of the lottery and lottery games as defined in Section 59-150-20(7) is restricted to: expenditure of one-half of one percent of gross lottery revenues; contracts of one year or less and awarded by the board after competitive bidding; information about how the game is played; identification of amounts or recipients, or both of them, of funding from the proceeds of ticket sales; explanation of the permitted uses of lottery proceeds; probability of winning; an entertainment context; encouragement of responsible play; information about recognizing and seeking treatment for compulsive gambling; sites and methods designed to reach the responsible adult player; and advertisements and promotions placed exclusively by the commission in newspapers or periodicals or on the commission official web site.

Advertising and promotion of the lottery and lottery games must not include: inducements to play; targeting with the intent to exploit specific ethnic groups or economic classes of people; representations of the game as an investment or the answer to financial concerns; exaggeration of odds of winning; the name or image, or both, of an elected official, or the State Seal or its likeness; praise of a lottery player or denigration of a nonplayer; implication that the game is one of skill; suggestion that the lottery player is contributing money for the good of the State; any advertising outside of the lottery retailer's business premises; and advertising in connection with or at the site of a public school or institution of higher learning or sponsorship of an activity at a public school or institution of higher learning.


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Lottery advertising and promotion also: must include posting of warnings of the dangers and risks of gambling, and the odds of winning, on a three by two foot sign in a conspicuous location in all lottery retailer facilities; must otherwise encourage responsible decision making regarding lottery play by adults, discourage abusive use of the lottery product; and, other than as permitted in the provisions of this chapter for the commission and the lottery retailer, may not be undertaken by another entity or individual;

(18)   act as a lottery retailer, conduct promotions which involve the dispensing of lottery game tickets or shares, and establish and operate a sales facility to sell lottery game tickets or shares and related merchandise, except that the commission shall not establish, operate, or authorize a lottery sales facility at any state Welcome Center or state rest area; and

(19)   promulgate regulations and adopt and amend policies and procedures as necessary to carry out and implement its powers and duties, organize and operate the commission, regulate the conduct of lottery games as defined in Section 59-150-20(7), and other matters necessary or desirable for the efficient and effective operation of the lottery for the convenience of the public. The promulgation of the regulations and adoption of the policies and procedures are subject to the requirements of the Administrative Procedures Act.

(B)   The powers enumerated in subsection (A) are cumulative of and in addition to those powers enumerated elsewhere in this chapter, and do not limit or restrict other powers of the commission.

(C)   The commission is prohibited from distributing monies other than as prescribed by this chapter including, but not limited to, the prohibition of contributing to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); and the prohibition of making an independent expenditure to advance or defeat a measure related to the lottery.

(D)   The commission is not authorized to use any machine specifically prohibited by Sections 12-21-2710, 16-19-40, except a machine or device dispensing a lottery ticket, and 16-19-50.

(E)   The commission is subject to the limitations upon, and exemptions from, liability and damages provided in the South Carolina Tort Claims Act.


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(F)   The commission shall not issue, sell, or authorize the sale of lottery tickets or shares at a location licensed to provide deferred presentment services pursuant to Chapter 39 of Title 34.

(G)   The commission shall not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and the commission may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section 2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the commission.

(H)   The commission may not sell or give away tickets for promotional purposes.

Section 59-150-70.   In accordance with the Administrative Procedures Act, the board may promulgate regulations and adopt policies and procedures regulating the conduct of lottery games in general; except the commission may promulgate temporary regulations and adopt policies and procedures to implement the provisions of this chapter which must be consistent with this chapter, except as otherwise provided in this section. The commission shall have tickets available for purchase by the public no later than November 1, 2001, or as soon as practicable. These temporary regulations, polices, and procedures are not considered regulations as defined by the Administrative Procedures Act; however, these temporary regulations, policies, and procedures have the force and effect of law. The only lottery games that may be played pursuant to these temporary regulations, policies, and procedures are instant tickets, dollar tickets, and dollar joint- or multi-state lottery games. The commission shall submit regulations to the General Assembly for review in accordance with the Administrative Procedures Act at the January 15, 2002, legislative session. The temporary regulations authorized in this section are repealed on July 15, 2004, or on the effective date of regulations promulgated pursuant to the Administrative Procedures Act, whichever date occurs first. If regulations promulgated pursuant to the Administrative Procedures Act have not taken effect by July 15, 2004, the commission may promulgate the temporary regulations authorized by this section as emergency regulations pursuant to Section 1-23-130. For purposes of this section, the circumstances required for emergency regulations in Section 1-23-130(A) do not apply, but all other provisions of Section 1-23-130 are applicable. The regulations, policies, and procedures must specify, but are not limited to specifying, the:


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(1)   type of lottery games as described in Section 59-150-20(7). The lottery games may include the selling of lottery game tickets or shares or the use of electronic or mechanical devices, except those electronic or mechanical devices prohibited by Section 59-150-20(7), and except that the game or activity in which the winner is selected must not be based upon the outcome of a football, basketball, baseball, or similar game or sports event;

(2)   sale price of lottery game tickets or shares and the manner of sale, except that all sales must be for cash only. Payment by checks, credit cards, charge cards, or other form of deferred payment and payment by debit card are prohibited;

(3)   number and amount of prizes;

(4)   method and location of selecting or validating winning lottery game tickets or shares;

(5)   manner and time of payment of prizes, which may include lump sum payments or installments over a period of years, except that the State is not liable for the nonpayment of a prize;

(6)   manner of payment of prizes by a lottery retailer to the holders of a winning lottery game ticket or share including, without limitation, provision for payment of prizes not exceeding six hundred dollars after deducting the price of the lottery game ticket or share and after performing validation procedures appropriate to the game and as specified by the board;

(7)   frequency of lottery games and drawings or selection of winning lottery game tickets or shares;

(8)   means of conducting drawings, except that an elected or appointed official, other than the members of the board or its designee, must not preside or appear at a drawing, and except that the drawing may be aired publicly only by means of a public service announcement and carried by any news outlet that makes public service time available for that purpose;

(9)   method to be used in selling lottery game tickets or shares, which may include the use of electronic or mechanical devices, but the devices must be placed on the premises of the lottery retailer in a location which is only accessible to the lottery retailer or his employees;

(10)   manner and amount of compensation to a lottery retailer within the limits of this chapter;

(11)   other matters necessary or desirable toward ensuring the efficient and effective operation of lottery games as defined in Section


Printed Page 2948 . . . . . Thursday, May 3, 2001

59-150-20(7), the continued entertainment and convenience of the public, and the integrity of the lottery.

Section 59-150-80.   (A)   The board shall appoint and provide for the compensation of an executive director who must be an employee of the commission and who directs the day-to-day operations and management of the commission and is vested with powers and duties specified by the board and by law. The executive director serves at the pleasure of the board.

(B)   The board shall hire and provide for the compensation of an internal auditor and necessary staff who must be employees of the commission and who are vested with the powers and duties specified by the board and by law. The internal auditor shall report directly to the board.

Section 59-150-90.   (A)   The executive director of the commission shall direct and supervise all administrative and technical activities as provided for in this chapter, according to the terms and conditions as may be established by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years and with the regulations promulgated and policies and procedures adopted by the board. It is the duty of the executive director to facilitate the initiation and supervise and administer the operation of the lottery games as defined in Section 59-150-20(7); employ and direct necessary personnel; employ by contract and compensate necessary persons and firms, except that the contract may not be with an entity for the purpose of having that entity undertake the organization and conduct of the lottery; promote or provide for promotion of the lottery and functions related to the commission; prepare a budget for the approval of the board; require bond from a lottery retailer and a lottery vendor in amounts required by the board; report monthly to the State Auditor and the board a full and complete statement of lottery revenues and expenses for the preceding month; and perform other duties generally associated with an executive director of a commission of an entrepreneurial nature.

(B)   The executive director for good cause may suspend, revoke, or refuse to renew a contract entered into as provided by the provisions of this chapter or the regulations, policies, and procedures of the board.

(C)   The executive director or his designee may conduct hearings and administer oaths to persons for the purpose of assuring the security or integrity of lottery operations or to determine the qualifications of or compliance by a lottery vendor and a lottery retailer.


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(D)   The executive director shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

Section 59-150-100.   (A)   The commission shall establish and maintain a personnel program for its employees and fix the compensation and terms of compensation of its employees.

(B)   An employee of the commission or an immediate family member of an employee of the commission, as defined in Section 59-150-20(6), may not have a financial interest in a lottery vendor doing business or proposing to do business with the commission and is otherwise subject to the South Carolina Ethics Reform Act.

(C)   An employee of the commission who has decision-making authority shall not participate in a decision involving a lottery retailer with whom the employee has an economic interest as defined in the South Carolina Ethics Reform Act.

(D)   Notwithstanding any other provision of law, an employee of the commission who leaves his employment may not represent a lottery vendor or lottery retailer before the commission for a period of two years following termination of employment with the commission.

(E)   A background investigation must be conducted on each applicant who has reached the final selection process before employment by the commission at the level of division director and above and at any level within any division of security and as otherwise required by the board. The commission shall pay for the actual cost of the investigations and may contract with SLED for the performance of the investigations. The results of a background investigation are not a record open to the public pursuant to the Freedom of Information Act.

(F)   A person who has been convicted of a felony or bookmaking or other forms of illegal gambling or of a crime involving moral turpitude may not be employed by the commission.

(G)   The commission shall bond commission employees who have access to commission funds or lottery revenue in an amount provided by the board and may bond other employees as necessary.

Section 59-150-110.   (A)   The Governor shall appoint a Lottery Retailer Advisory Board to be composed of ten lottery retailers, representing the broadest possible spectrum of geographical, racial, gender, and business characteristics of a lottery retailer. The Governor also shall appoint the chairman of the advisory board. The function of


Printed Page 2950 . . . . . Thursday, May 3, 2001

the advisory board is to advise the lottery board on retail aspects of the lottery and to present the concerns of a lottery retailer throughout the State. The advisory board may establish a consumer representatives committee to help provide additional insight on other aspects of lottery retail sales.

(B)   Members appointed to the advisory board serve terms of two years, except that four of the initial lottery retailer appointees serve initial terms of one year and five serve initial terms of two years. The chairman of the advisory board serves co-terminus with the Governor.

(C)   The advisory board shall establish its own rules and internal operating procedures. Members of the advisory board serve without compensation or the per diem, subsistence, or mileage provided by law for members of state boards, committees, and commissions. The advisory board may report to the board of commissioners in writing at any time. The board of commissioners may invite the advisory board to make an oral presentation to the commissioners at regular meetings of the board.

Section 59-150-120.   The commission shall provide training programs and other educational activities to enable small and minority businesses to compete for contracts on an equal basis. The board shall monitor the results of small and minority business participation and shall report the results of small and minority business participation to the State Human Affairs Commission on at least an annual basis pursuant to Section 1-13-110.

Section 59-150-130.   (A)   In coordination with SLED, the commission shall investigate the financial responsibility, security, and integrity of a lottery vendor who is a finalist in submitting a bid, proposal, or offer as part of a procurement. To defray a portion of the expense of this investigation, each lottery vendor finalist shall submit a certified check for five thousand dollars to the commission. This sum must be placed in an escrow account from which SLED must be paid to conduct the investigation pursuant to this section. If five thousand dollars is not sufficient to complete the investigation, the commission shall require the lottery vendor finalist to remit additional funds. Any funds remaining in the escrow account after the investigation is complete must be returned to the lottery vendor finalist. At the time of submitting the bid, proposal, or offer to the commission, the commission shall require disclosure of the:

(1)   lottery vendor's name and address and, as applicable, the names and addresses of the following, if the lottery vendor is:


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(a)   a corporation, the officers and directors and each stockholder in the corporation, except that in the case of owners of equity securities of a publicly-traded corporation, the names and addresses of only those known to the corporation to own beneficially five percent or more of the securities must be disclosed;

(b)   a trust, the trustee and all persons entitled to receive income or benefits from the trust;

(c)   an association, the members, officers, and directors; and

(d)   a partnership or joint venture, all of the general partners, limited partners, or joint venturers;

(2)   states and jurisdictions in which the lottery vendor does business and the nature of the business for each such state or jurisdiction;

(3)   states and jurisdictions in which the lottery vendor has contracts to supply gaming goods or services including, but not limited to, lottery goods and services, and the nature of the goods or services involved for each state or jurisdiction;

(4)   states and jurisdictions in which the lottery vendor has applied for, sought renewal of, received, been denied, or had revoked, or has issuance pending of, a lottery or gaming license of any kind or had fines or penalties assessed to his license, contract, or operation and the disposition of each in each state or jurisdiction. If a lottery or gaming license or contract has been revoked or has not been renewed or a lottery or gaming license or application has been denied or is pending and has remained pending for more than six months, all of the facts and circumstances underlying the failure to receive a license must be disclosed;

(5)   details of a finding or any plea, conviction, or adjudication of guilt in a state or federal court of the lottery vendor for a felony or other criminal offense other than a traffic violation. A fingerprint exemplar may be required to satisfy this item;

(6)   details of any bankruptcy, insolvency, reorganization, or corporate or individual purchase or takeover of another corporation, including bonded indebtedness, or pending litigation of the lottery vendor;

(7)   contributions made to the campaign of a candidate for the General Assembly or statewide constitutional office, to any political party, as defined in Section 8-13-1300(26), or to a committee, as defined in Section 8-13-1300(6), or independent expenditures made to advance or defeat a measure related to the lottery for the twelve-month period before the application and up to the date of disqualification of


Printed Page 2952 . . . . . Thursday, May 3, 2001

the applicant or the awarding of the contract, whichever occurs first; and

(8)   additional information the commission determines appropriate for the procurement involved.   If at least twenty percent of the cost of a lottery vendor's contract is subcontracted, the lottery vendor shall disclose all of the information required by this section for the subcontractor as if the subcontractor were itself a lottery vendor.

(B)   A lottery procurement contract must not be entered into with a lottery vendor who has not complied with the disclosure requirements described in subsection (A), and a contract with a noncomplying lottery vendor is voidable at the option of the commission. The commission may terminate a contract with a lottery vendor who does not comply with the requirements for periodically updating the disclosures during the time specified in the contract. The provisions of this section must be construed broadly and liberally to achieve the ends of full disclosure of all information necessary to allow for a full and complete evaluation by the commission of the competence, integrity, background, and character of a lottery vendor for procurements.

(C)   A procurement contract must not be entered into with a lottery vendor who has been found guilty of a felony related to the security or integrity of the lottery in this or any other jurisdiction.

(D)   A procurement contract must not be entered into with a lottery vendor if the lottery vendor has an ownership interest in an entity that supplied consultation services under contract to the commission regarding the request for proposals pertaining to those particular goods or services.

(E)   A lottery vendor or applicant for a major procurement contract may not pay, give, or otherwise make available an economic opportunity, gift, loan, gratuity, special discount, favor, hospitality, or service, excluding food and beverages having an aggregate value not exceeding twenty-five dollars in one day or two hundred dollars in a calendar year, or any other thing of value, to the executive director, a board member, or an employee of the commission or to a member of his immediate family residing in the same household. For purposes of this subsection all terms are used as defined in Section 8-13-100.

(F)   A lottery vendor who has entered into the competitive solicitation process for a procurement contract or has been awarded a procurement contract with the commission shall not contribute, for a period of twelve months before entering into the procurement process, except that during the first twelve months the period must be from the date of enactment, and during the term of the contract, to the campaign


Printed Page 2953 . . . . . Thursday, May 3, 2001

of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

(G)   A former public official holding public office, a former public member holding public membership, or a former public employee having public employment on or after the effective date of this chapter may not serve a lottery vendor for a period of two years after terminating his public service or employment.

(H)   A lottery vendor may not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and a lottery vendor may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section 2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the lottery vendor.

(I)   A lottery vendor may not advertise or promote the lottery or its business relationship with the commission.

(J)   A lottery vendor that is a contractor with the State or any agency, commission, or department of the State shall disclose, upon written inquiry, the amount of any commission, referral fee, finder's fee, consulting fee, contingency fee, or other monies paid in connection with obtaining the contract and the name of the person to whom the monies were paid.

(K)   The prohibitions and restrictions described in item (A)(7) and subsections (F) and (H) specifically apply to a lottery vendor as defined in Section 59-150-20(9) and its employees, members of its board, and holders of an interest in it of more than ten percent, and their immediate family members, as defined in Section 59-150-20(6).

(L)   If a court of competent jurisdiction rules that item (A)(7) or subsection (F) or (H) are unconstitutional or otherwise unenforceable, then the commission is prohibited from entering into a contract with a lottery vendor if the fee or commission payable in connection with the contract is based on sales or profitability.

Section 59-150-140.   (A)   At the execution of the contract with the commission, a lottery vendor shall post a performance bond or letter of credit from a bank or credit provider acceptable to the commission in an amount determined by the commission for that particular bid or contract. Instead of the bond, a lottery vendor, to assure the faithful performance of its obligations, may deposit and maintain with the commission securities that are interest bearing or


Printed Page 2954 . . . . . Thursday, May 3, 2001

accruing and that are rated in one of the three highest classifications by an established nationally recognized investment rating service. Securities eligible pursuant to this section are limited to:

(1)   certificates of deposit issued by solvent banks or savings associations which are organized and existing under the laws of this State or under the laws of the United States and are approved by the commission;

(2)   United States bonds, notes, and bills for which the full faith and credit of the government of the United States is pledged for the payment of principal and interest; and

(3)   corporate bonds approved by the commission. The corporation that issued the bonds must not be an affiliate or subsidiary of the depositor. The securities must be held in trust and must have at all times a market value equal at least to the full amount estimated to be paid annually to the lottery vendor under contract.

(B)   Each lottery vendor must be qualified to do business in this State and shall file appropriate tax returns as provided by the laws of this State. All contracts pursuant to this section are governed by the laws of this State.

(C)   A contract may not be let with a lottery vendor in which a public official has an ownership interest unless the letting of the contract complies with Section 8-13-775.

(D)   Procurement contracts must be handled in accordance with the South Carolina Consolidated Procurement Code.

(E)   In all contracts entered into in connection with this chapter, the resident lottery vendor preference provided in Section 11-35-1524 must apply to procurements made by the commission, except that the following additional provisions apply:

(1)   the preference also must apply to the procurement of services, as defined in Section 11-35-310(29), and advertising;

(2)   with respect to the procurement of services or advertising, the definition of the term 'resident lottery vendor' must be modified as provided in this item. Section 11-35-1524(B)(6)(c) does not apply to a lottery vendor providing services or advertising. Instead of Section 11-35-1524(B)(6)(c), the lottery vendor shall provide services or advertising which are representative of the general type of services or advertising on which the bid is submitted;

(3)   with respect to the procurement of services or advertising, instead of providing the certifications provided in Section 11-35-1524(C), the lottery vendor shall certify in writing in the bid:

(a)   that he is resident of the State;


Printed Page 2955 . . . . . Thursday, May 3, 2001

(b)   the services or advertising is available; and

(c)   the cost of the services or advertising is not unreasonable.

Section 59-150-150.   (A)   The commission shall develop and maintain a statewide network of lottery retailers to serve the public convenience and promote the sale of tickets or shares and the playing of lottery games as defined in Section 59-150-20(7) while ensuring the integrity of the lottery operations, games, and activities. A lottery retailer's sales of lottery tickets or shares may not exceed sixty percent annually of its total business as measured by gross revenues. The Department of Revenue shall provide data concerning a lottery retailer's gross revenues to assist the commission in verifying compliance with this provision. The commission also shall provide a small retailer a chance to participate in the sales of lottery tickets or shares; provide for compensation to a lottery retailer in the form of commissions in an amount of seven percent of gross sales and a one percent incentive for cashing winning tickets for prizes less than six hundred dollars; and issue a license to each person with whom it contracts as a lottery retailer for purposes of display. Each lottery retailer shall post and display conspicuously its license on the disclosure sign required by Section 59-150-60(A)(17). A license is not assignable or transferable.

(B)   The board shall develop a list of objective criteria upon which the qualification of a lottery retailer must be based. Separate criteria must be developed to govern the selection of a lottery retailer of instant tickets and on-line a lottery retailer. In developing these criteria, the board shall consider factors such as the applicant's financial responsibility, integrity, and reputation, and the security of the applicant's place of business or activity, and accessibility to the public. The board shall not consider political affiliation or activities or monetary contributions to political organizations or candidates for public office. The criteria must include, but is not limited to, the following:

(1)   The applicant must be current in filing all applicable tax returns to the State of South Carolina and in payment of all taxes, interest, and penalties owed to the State of South Carolina, excluding items under formal appeal pursuant to applicable statutes. The Department of Revenue shall provide this information to the commission.


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(2)   A person, partnership, unincorporated association, corporation, or other business entity must not be selected as a lottery retailer if he or it:

(a)   has been convicted of a criminal offense related to the security or integrity of the lottery in this or another jurisdiction;

(b)   has been convicted of unlawful gambling activity, false statements, false swearing, or perjury in this or another jurisdiction or convicted of a crime punishable by more than one year of imprisonment or a fine of more than one thousand dollars, or both, unless the person's civil rights have been restored and at least five years have elapsed from the date of the completion of the sentence without a subsequent conviction of a crime described in this subitem;

(c)   has been found to have violated the provisions of this chapter or a regulation, policy, or procedure of the commission, unless either ten years have passed since the violation or the board finds the violation both minor and unintentional in nature;

(d)   is a lottery vendor or an employee or agent of a lottery vendor doing business with the commission;

(e)   resides in the same household as an officer of the commission;

(f)   has made a statement of material fact to the commission knowing the statement is false;

(g)   has a business of selling lottery tickets or shares that accounts for more than sixty percent annually of its gross revenues, except that the commission may not sell or give away lottery tickets or shares as a lottery retailer, as provided in Section 59-150-210;

(h)   has not attained the age of twenty-one years, except that this age restriction applies only to the lottery retailer or lottery retailer applicant and not to a bona fide employee of the lottery retailer; and

(i)     has its place of business located within three hundred feet of a church, school, or playground situated within a municipality or within five hundred feet of a church, school, or playground situated outside of a municipality. These distances must be measured in a straight line, without regard to intervening structures or objects, from the nearest property line of the lot on which a building or structure is used as a lottery retailer to the nearest property line of the location of the church, school, or playground, which are defined as follows:

(i)   'church' means an establishment, other than a private dwelling, where religious services are usually conducted;


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(ii)   'school' means an establishment, other than a private dwelling, where the usual processes of education are usually conducted; and

(iii)   'playground' means a place, other than grounds at a private dwelling, which is provided by the public or members of a community for recreation.

The restrictions in subitem (i) do not apply to the renewal of a license or to a new application for a location that is licensed at the time the new application is filed with the commission.

(3)   A person applying to become a lottery retailer must be charged a uniform application fee for each lottery outlet. A lottery retailer who participates in on-line lottery games must be charged a uniform application fee for each on-line outlet.

(4)   A lottery retailer contract executed pursuant to this chapter may be suspended, revoked, or terminated for good cause by the executive director or his designee if the lottery retailer is found to have violated a provision of this chapter or the regulations, policies, and procedures established by the board. Review of activities is subject to the Administrative Procedures Act.

(5)   Lottery retailer contracts may be renewable annually at the discretion of the commission, unless sooner canceled or terminated.

(6)   A lottery retailer or lottery retailer applicant shall not pay, give, or otherwise make available anything of value to a member of the board of directors of the commission in violation of provisions of the South Carolina Ethics Reform Act.

(7) A lottery retailer who enters into a contract with the commission shall file an initial certified report with the State Ethics Commission showing all contributions or donations made to a committee, as defined in Section 8-13-1300(6). The lottery retailer shall file additional certified reports within ten days following the end of each calendar quarter and for the duration of the contract with the commission.

Section 59-150-160.   (A)   A lottery retailer contract is not transferable or assignable. A lottery retailer shall not contract with a person for lottery goods or services except with the approval of the board.

(B)   Lottery game tickets and shares must be sold only by the lottery retailer named on the lottery retailer certificate.

(C)   A lottery retailer may not advertise or promote the lottery outside of the lottery retailer's business premises, and is restricted to


Printed Page 2958 . . . . . Thursday, May 3, 2001

the advertising and promotion as permitted in Section 59-150-60(A)(17).

Section 59-150-170.   (A)   The commission shall establish a fidelity fund separate from all other funds and shall assess each lottery retailer a one-time fee not to exceed one hundred dollars for each sales location. Monies deposited into the fund may be used to cover losses the commission may experience due to nonfeasance, misfeasance, or malfeasance of a lottery retailer. The monies may be invested by the commission pursuant to state investment practices. All earnings attributable to the investments accrue to the fund. In addition, the funds may be used to purchase blanket bonds covering the commission against losses from all a lottery retailer. At the end of each fiscal year, the commission shall pay to the Education Lottery Account any amount in the fidelity fund which exceeds five hundred thousand dollars, and the funds paid must be treated as net proceeds from the lottery.

(B)   A reserve account may be established as a general operating expense to cover amounts considered uncollectible from the a lottery retailer. The commission shall establish procedures for minimizing losses that may be experienced by reason of nonfeasance, misfeasance, or malfeasance of a lottery retailer, and shall exercise and exhaust all available options in the procedures before amounts are written off to this account.

(C)   The commission may require a lottery retailer to post an appropriate bond, as determined by the commission, using an insurance company acceptable to the commission. The amount must not exceed the applicable district sales average of lottery game tickets for two billing periods.

(D)(1)   In its discretion, the commission may allow a lottery retailer to deposit and maintain with the commission securities that are interest bearing or accruing. Securities eligible pursuant to this item are limited to:

(a)   certificates of deposit issued by solvent banks or savings associations organized and existing under the laws of this State or under the laws of the United States;

(b)   United States bonds, notes, and bills for which the full faith and credit of the United States is pledged for the payment of principal and interest; and

(c)   federal agency securities by an agency or instrumentality of the United States government.

(2)   The securities must be held in trust in the name of the commission.


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Section 59-150-180.   (A)   A retail contract executed by the commission pursuant to this chapter must specify the reasons for which the contract may be canceled, suspended, revoked, or terminated by the commission including, but not be limited to:

(1)   a violation of this chapter, a regulation, or a policy or procedure of the commission;

(2)   failure to account accurately or timely for lottery game tickets, lottery games, revenues, or prizes as required by the commission;

(3)   fraud, deceit, or misrepresentation;

(4)   insufficient sales;

(5)   conduct prejudicial to public confidence in the lottery;

(6)   filing for or placement in bankruptcy or receivership of the lottery retailer;

(7)   a material change, as determined in the sole discretion of the commission, in a matter considered material by the commission in executing the contract with the lottery retailer; or

(8)   failure to meet any of the objective criteria established by the commission pursuant to this chapter.

(B)   If cancellation, denial, revocation, suspension, or rejection of renewal of a lottery retailer contract is in the best interest of the lottery, the public welfare, or the State of South Carolina, the executive director or his designee, in his discretion, may cancel, suspend, revoke, or terminate, after notice and a right to a hearing, a contract issued pursuant to this chapter. A hearing must be held within sixty days of notice of cancellation, suspension, revocation, or termination and conducted by the executive director or his designee. A party to the contract aggrieved by the decision of the executive director or his designee may appeal the adverse decision to the board, and then to the Administrative Law Judge Division, pursuant to the Administrative Procedures Act.

Section 59-150-190.   (A)   All proceeds from the sale of the lottery game tickets or shares constitute a trust fund until paid to the commission either directly or through the commission's authorized collection representative. A lottery retailer and officers of a lottery retailer's business have a fiduciary duty to preserve and account for lottery proceeds, and a lottery retailer personally is liable for all proceeds. Proceeds include unsold instant tickets received by a lottery retailer and cash proceeds of the sale of lottery products, net of allowable sales commissions and credit for lottery prizes sold or paid to winners by a lottery retailer. Sales proceeds and unused instant tickets


Printed Page 2960 . . . . . Thursday, May 3, 2001

must be delivered to the commission or its authorized collection representative upon demand.

(B)   The commission shall require a lottery retailer to place all lottery proceeds due the commission in accounts in institutions insured by the Federal Deposit Insurance Corporation (FDIC) no later than the close of the next banking day after the date of their collection by the lottery retailer until the date they are paid over to the commission. At the time of the deposit, lottery proceeds are considered the property of the commission, and a lottery retailer personally is liable for those proceeds due the commission. The commission may require a lottery retailer to establish a single separate electronic funds transfer account where available for the purpose of receiving monies from ticket or share sales, making payments to the commission, and receiving payments for the commission. Unless otherwise authorized in writing by the commission, each lottery retailer shall establish a separate bank account for lottery proceeds which must be kept separate and apart from all other funds and assets, and must not be commingled with any other funds or assets. A lottery retailer, upon the deposit of lottery proceeds in excess of insurance coverage by the FDIC, shall furnish an indemnity bond from a responsible surety company authorized to do business in this State in an amount sufficient to protect the State against loss in the event of insolvency or liquidation of the institution or for another cause. A lottery retailer, instead of the indemnity bond, may pledge as collateral for the deposits, obligations of the United States, obligations fully guaranteed both as to principal and interest by the United States, obligations of the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, the Federal Home Loan Mortgage Corporation, or general obligations of this State or a political subdivision of it. The State Treasurer shall exercise prudence in accepting the securities listed as collateral. The surety or collateral must be filed with the State Treasurer at time of deposit.

(C)   Proceeds from the sale of lottery game tickets or shares received by a lottery retailer who becomes insolvent or dies insolvent, are due the commission from the person or his estate in preference over all debts or demands.

(D)   A lottery retailer is not required to pay for lottery tickets or shares until the tickets or shares have been activated by the commission.

Section 59-150-200.   If a lottery retailer's rental payments for the business premises are contractually computed, in whole or in part, on


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the basis of a percentage of retail sales and the computation of retail sales is not defined explicitly to include sales of lottery game tickets or shares in a state operated or state managed lottery, only the compensation received by the lottery retailer from the commission may be considered the amount of the lottery retail sale for purposes of computing the rental payment.

Section 59-150-210.   (A)   A person shall not sell a lottery game ticket or share at a price other than that established by the commission. A person, other than a duly certified lottery retailer, shall not sell lottery game tickets, but a person may purchase lawfully lottery game tickets or shares and make a gift of the lottery game tickets or shares to another. The commission may designate certain agents and employees to sell lottery game tickets or shares directly to the public.

(B)   A lottery retailer shall not sell a lottery game ticket or share except from the locations listed in the lottery retailer's contract and as evidenced by the lottery retailer's certificate of authorization unless the commission authorizes, in writing, a temporary location not listed in the lottery retailer's contract.

(C)   Lottery game tickets or shares must not be sold to persons under eighteen years of age, but a person eighteen years of age or older may purchase lawfully lottery game tickets or shares and make a gift to a person of any age. If a minor lawfully receives a winning lottery game ticket, the commission may direct payment of proceeds of a lottery prize in an amount not exceeding two thousand five hundred dollars to the parent or guardian of the minor without court approval and without appointment of a conservator. In the case of a lottery prize greater than two thousand five hundred dollars and not exceeding twenty-five thousand dollars, payment must be made in accordance with the procedures outlined in Section 62-5-103 as they relate to distribution. In the case of a prize in an amount greater than twenty-five thousand dollars, payment must be made to a duly appointed conservator to be held for the benefit of the minor, pursuant to Section 62-5-433.

(D)   A lottery ticket or share may not be sold on the date of any general elections; within three hundred feet of a church, school, or playground, as provided in Section 59-150-150(B)(2)(i); to a lottery game other than that defined in Section 59-150-20(7); or to a lottery game with corporate sponsorship.

Section 59-150-220.   (A)(1)   Upon the theft of instant tickets, a lottery retailer shall report immediately the theft to both the local law enforcement authority and to the commission's division of security.


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(2)   If tickets are stolen before the book is activated, and no tickets within the book have been sold:

(a)   the lottery retailer must be charged a nonrefundable service fee for each incident in an amount determined by the commission to cover its costs only, so long as the name of the local law enforcement agency contacted and the assigned case number are furnished promptly to the commission;

(b)   if the name of the local law enforcement agency and the assigned case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, the commission shall charge the lottery retailer in accordance with subsection (3)(b).

(3)   If tickets are stolen after the book has been activated or tickets within the book have been sold:

(a)   a lottery retailer must be charged the net sales value (retail sales value less commission) for each book, less the low tier prize values of stolen tickets not paid at the time of the incident, so long as the lottery retailer furnished the name of the local law enforcement agency and the assigned case number to the commission;

(b)   if the name of a law enforcement agency and case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, credit for the unpaid low tier prizes must not be given and the lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4)   The commission shall adjust charges described in item (3) for the following reasons:

(a)   the commission shall charge a lottery retailer the low tier prize value of tickets that are presented to the commission as claims subsequent to the date of the incident. The commission shall determine which prizes must be subsequently paid based upon the facts of the incident, and that amount must be charged to the lottery retailer;

(b)   the commission shall provide credit for recovered stolen tickets as follows:

(i)   the net sales value of the tickets recovered must be compared to the total value of the uncashed low tier prizes for each book of tickets. The lottery retailer shall receive credit for the greater of these two values;

(ii)   recovered tickets must be returned to the commission by the declared end of game redemption deadline or one hundred eighty days from the date of the incident, whichever is later. The


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game, book, and ticket number must be legible on each ticket for the lottery retailer to receive credit. If tickets are being held as evidence in a criminal investigation by a law enforcement agency, the commission shall accept a property report from that agency by the declared end of the game redemption deadline or one hundred eighty days from the date of the incident, whichever is later, detailing the game, book, and ticket number or Void If Removed Number (VIRN) for the tickets being held, as documentation to provide credit;

(iii)   recovered scratched tickets may be accepted for credit only if that condition of the tickets is identified in documentation provided to the commission by the local law enforcement agency;

(iv)   the lottery retailer shall receive no credit for recovered tickets that have been validated;

(v)   the commission shall determine the credits provided based upon the facts of the incident, and that amount must be credited to the lottery retailer.

(5)   Books reported to the commission as stolen must be marked in the commission's records to prevent validation and payment of prizes within the book.

(B)(1)   Upon the loss or damage of instant tickets, a lottery retailer immediately shall report the loss or damage to the both the local law enforcement authority and to the commission's division of security.

(2)   If tickets are damaged before the book is activated, no tickets within the book are sold, and all tickets in the book are returned to the commission, a lottery retailer may not be charged a service fee. If tickets are lost before the book is activated and no tickets within the book have been sold, a lottery retailer must be charged a nonrefundable service fee of twenty-five dollars for each incident for up to four books and five dollars for each book over four books.

(3)   If tickets are lost or damaged after the book is activated or if tickets within the book are sold, a lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4)   Upon the written approval by the commission, the commission shall provide credit for recovered lost or damaged tickets for the net sales value of the tickets recovered.

(a)   To receive approval, the lottery retailer shall provide the facts of the incident in writing to the commission for consideration.

(b)   The written request and recovered tickets must be returned to the commission by the redemption deadline and the game, book, and ticket number must be legible on each ticket in order for the lottery retailer to receive credit.


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(c)   Scratched tickets must not be accepted for credit. A scratched ticket is one that in the commission's judgment has been compromised as to the security and integrity of the ticket due to removal of latex.

(d)   Tickets identified as validated before the recovery result in no credit to the lottery retailer.

(5)   Books reported to the commission as lost or damaged must be marked as such in the commission's records to prevent validation and payment of prizes within the book.

(6)   In the event of acts of God, occurrences of nature, or other natural disasters, the commission may waive the requirements of this subsection.

Section 59-150-230.   (A)   Lottery prizes are subject to the South Carolina state income tax. Residents and nonresidents of this State who receive a lottery prize in excess of five hundred dollars are subject to a mandatory withholding of state income tax as required by law. Federal income tax must be withheld from lottery prizes in excess of five thousand dollars. Neither the State nor a county, municipality, or other political subdivision of this State may impose a tax on the sale of a lottery ticket or share or on the payment of a prize pursuant to this chapter; nor may a county, municipality, or other political or public subdivision assess an ad valorem tax against a lottery ticket or share bought or sold pursuant to this chapter.

(B)   Except as otherwise provided in this chapter, attachments, garnishments, or executions authorized and issued pursuant to law must be withheld if timely served upon the commission. This subsection does not apply to a lottery retailer.

(C)   The commission shall promulgate regulations and adopt policies and procedures to establish a system of verifying the validity of lottery games tickets or shares claimed to win prizes and to effect payment of prizes.

(1)   A prize, a portion of a prize, or a right of a person to a prize awarded is not assignable except as provided in this section. A prize or a portion of a prize remaining unpaid at the death of a prize winner must be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the commission with a notarized letter of direction from the settlor and no written notice of revocation has been received by the commission before the settlor's death. Following a settlor's death and before payment to a trustee, the commission shall obtain from the trustee a


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written agreement to indemnify and hold the commission harmless with respect to claims that may be asserted against the commission arising from payment to or through the trust. Notwithstanding any other provisions of this section, a person, pursuant to an appropriate judicial order, may be paid the prize to which a winner is entitled.

(2)   (a)   If the winner of a lottery game prize elects to receive his prize by way of deferred payments, the commission must deposit, in the same quarter as the prize was won and in a restricted account, the total amount of the prize. The deferred payments to the winner of the lottery game prize must be paid out only from that restricted account.

(b)   The restricted account provided in subitem (a) must be known as the 'Deferred Lottery Prize Payment Account'. The monies in the restricted account may be used only for the purpose of making deferred payments of a lottery game prize as elected by a prize winner. The monies in the Deferred Lottery Prize Payment Account may not be used to determine the assets of the commission, except to manifest them as encumbered.

(c)   The State Treasurer may invest the monies deposited in the Deferred Lottery Prize Payment Account as provided by law.

(3)   A prize must not be paid if it:

(a)   arises from claimed lottery game tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;

(b)   lacks captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or

(c)   fails to comply with additional specific regulations and public or confidential validation and security tests of the commission appropriate to the particular lottery game involved.

(4)   A particular prize in a lottery game must not be paid more than once, and if more than one person is entitled to a particular prize, the sole remedy of those persons is the award to each of them of an equal share in the prize.

(5)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days, or for a multi-state lottery game within one hundred eighty days, after the end of the lottery game. If a valid


Printed Page 2966 . . . . . Thursday, May 3, 2001

claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter.

(D)   A prize must not be paid upon a lottery game ticket or share purchased or sold in violation of this chapter and is an unclaimed prize for purposes of this section.

(E)   The commission is discharged of all liability upon payment of a prize.

(F)   A lottery game ticket or share must not be purchased by and a prize must not be paid to a member of the board, an officer or employee of the commission, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence. A lottery game ticket or share must not be purchased by and a prize must not be paid to an officer, employee, agent, or a subcontractor of a lottery vendor, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence if he has access to confidential information that may compromise the integrity of the lottery.

(G)   A lottery prize may not be paid to a person who is incarcerated or on probation or parole. A lottery prize payment received in violation of this subsection must be returned immediately and in full to the commission.

(H)   The use of an electronic or mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and their employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense as a prize coins or currency. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40 and 16-19-50.

(I)   Unclaimed prize money must be deposited in the Education Lottery Account each year. At least five hundred thousand dollars of the unclaimed prize money in the Education Lottery Account must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the South Carolina Department of Alcohol and Other Drug Abuse Services for the treatment of compulsive gambling disorder and educational programs related to that disorder, including a gambling hotline. If unclaimed prize money does not amount to at least five hundred thousand dollars in any one year of operation, the commission shall provide the Education Lottery Account, through the operating funds of the commission, the monies for DAODAS for the provision of those services, in an amount equal to the difference between the


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unclaimed prize monies and at least five hundred thousand dollars; except that the amount of funding for DAODAS, at least five hundred thousand dollars, must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. The Director of the DAODAS shall report to the board on the programs implemented with these funds, and provide a copy of the report to the General Assembly.

Section 59-150-240.   (A)   The commission is subject to the provisions of Chapter 4, Title 30, the South Carolina Freedom of Information Act.

(B)   The commission shall perform full criminal background investigations before the execution of a lottery vendor contract.

(C)   The commission or its authorized agent shall:

(1)   conduct criminal background investigations and credit investigations on all potential a lottery retailer and employees;

(2)   supervise lottery game ticket or share validation and lottery drawings;

(3)   inspect, at times determined solely by the commission, the facilities or operations of a lottery vendor or lottery retailer to determine the integrity of the lottery vendor's product or compliance by the lottery retailer or lottery vendor with its contract;

(4)   report suspected violations of this chapter to the appropriate investigative and prosecutorial agency having jurisdiction over the violation; and

(5)   upon request, provide assistance to a solicitor, the Attorney General, or a law enforcement agency investigating a violation of this chapter.

Section 59-150-250.   (A)   A person who knowingly sells a lottery game ticket or share to a person under eighteen years of age or permits a person under eighteen years of age to play a lottery game is guilty of a misdemeanor and, upon conviction, must be fined not less than one hundred dollars nor more than five hundred dollars or be imprisoned not less than thirty days nor more than sixty days, or both, in the discretion of the court. It is an affirmative defense to a charge of a violation of this section that the lottery retailer reasonably and in good faith relied upon representation of proof of age in making the sale.

(B)   A person under eighteen years of age who knowingly purchases a lottery game ticket is guilty of a misdemeanor and, upon conviction, must perform twenty hours of community service or must be fined not less than one hundred dollars and not more than five hundred dollars.


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(C)   A lottery ticket or share must bear a conspicuous label prohibiting the play of the game by a person under eighteen years of age.

(D)   A lottery game using an electronic or mechanical device must bear a conspicuous label prohibiting the use of the device by a person under eighteen years of age. Electronic or mechanical device does not include machines and other gaming devices including video poker and games prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   A person who is incarcerated or on probation or parole who knowingly accepts a lottery prize is guilty of a misdemeanor and, upon conviction, must be fined not less than ten dollars nor more than one hundred dollars or imprisoned for not less than two days nor more than thirty days, or both.

(F) A person who is convicted of a violation of subsection (A) subjects his employer, for a first violation, to a fine not less than one hundred dollars nor more than two hundred fifty dollars; for a second violation, to a fine not less than two hundred fifty-one dollars nor more than five hundred dollars; and for a third and subsequent violation, to a fine not less than five hundred and one dollars and immediate license revocation by the commission.

Section 59-150-260.   (A)   A person who, with intent to defraud, falsely makes, alters, forges, utters, passes, or counterfeits a state lottery game ticket is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(B)   A person who influences or attempts to influence the winning of a prize through the use of coercion, fraud, deception, or tampering with lottery equipment or materials is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(C)   A person who is convicted of a violation of subsection (A) or (B) must not be the recipient of an award of a lottery prize or a portion of a lottery prize, and is ineligible for employment by the commission.

Section 59-150-270.   (A)   A person must not knowingly or intentionally make a material false statement in an application for a license or proposal to conduct lottery activities or a material false entry in a book or record which is compiled or maintained or submitted to the board or its designee pursuant to the provisions of this chapter. A person who violates the provisions of this section is guilty of a felony and, upon conviction, must be fined not more than twenty-five thousand dollars or the dollar amount of the false entry or statement,


Printed Page 2969 . . . . . Thursday, May 3, 2001

whichever is greater, or imprisoned for not more than five years, or both.

(B)   A person who is convicted of a violation of subsection (A) also must surrender his license immediately and is ineligible to be issued a license by the commission.

Section 59-150-280.   (A)   The commission may enter into intelligence sharing, reciprocal use, or restricted use agreements with the federal government, law enforcement agencies, lottery regulation agencies, and gaming enforcement agencies of other jurisdictions which provide for and regulate the use of information provided and received pursuant to the agreement.

(B)   Records, documents, and information in the possession of the commission received pursuant to an intelligence sharing, reciprocal use, or restricted use agreement entered into by the commission with a federal department or agency, a law enforcement agency, or the lottery regulation or gaming enforcement agency of a jurisdiction are considered investigative records of a law enforcement agency and are subject to the confidentiality and disclosure policies, and must not be released without the permission of the person or agency providing the record or information, except as may be required by the Freedom of Information Act.

Section 59-150-290.   The commission shall enter into its contracts for procurements in compliance with the South Carolina Consolidated Procurement Code.

Section 59-150-300.   (A)   Any lottery retailer, lottery vendor, applicant for a lottery retailer license, or lottery game ticket holder aggrieved by an action of the board may appeal that decision to the Administrative Law Judge Division. The action is subject to review by an administrative law judge on the record of the board, upon petition of the aggrieved person within ten days from receipt of official notice from the board of the action of which review is sought. Service of notice is presumed conclusively ten days after mailing by registered or certified mail to the applicant or licensee of notice at his last known address. An appeal to the Administrative Law Judge Division pursuant to this section is a contested case as defined by the Administrative Procedures Act, and subject to the procedural due process requirements provided for in Article 5, Chapter 23, Title 1 and the Rules of Procedure of the Administrative Law Judge Division. Appeals regarding lottery vendor contracts must be brought pursuant to the South Carolina Procurement Code.


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(B)   The Administrative Law Judge Division shall hear appeals from decisions of the board and, based upon the record of the proceedings before the board, may reverse the decision of the board only if the appellant proves the decision to be:

(1)   in violation of constitutional or statutory provisions;

(2)   in excess of the statutory authority of the board;

(3)   made upon unlawful procedure;

(4)   affected by other error of law;

(5)   clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6)   arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

(C)   The Administrative Law Judge Division may remand an appeal to the board to conduct further hearings.

(D)   For judicial review of a final decision of an administrative law judge in a case involving the commission, the petition by an aggrieved party must be filed with the circuit court and served on the opposing party not more than thirty days after the aggrieved party receives the final decision and order of the administrative law judge. Appeal in these matters is by right.

(E)   A lottery vendor who appeals the award of a procurement contract for the supply of a lottery game ticket system, share system, or an on-line or other mechanical or electronic system is liable for all costs of appeal and defense if the appeal is denied or the contract award is upheld. Cost of appeal and defense specifically includes, but is not limited to, administrative proceedings, court costs, bond, legal fees, and loss of income to the commission resulting from institution of the appeal if, upon the motion of the commission, the court finds the appeal was frivolous.

(F)   All actions and proceedings for review pursuant to this chapter, and all actions and proceedings to which the commission may be a party and in which a question arises pursuant to this chapter or pursuant to or concerning any order or decision of the commission must be given priority of hearing in all courts and reviewing entities over all other civil causes except election cases irrespective of position on the calendar.

Section 59-150-310.   (A)   The commission may expend, pursuant to the provisions of this chapter, monies received from any source, including income from the commission's operations, for effectuating its purposes, including the payment of the initial expenses of


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organization, administration, and operation of the commission and the lottery.

(B)   The commission must be self-sustaining and self-funded. Monies in the state general fund may not be used or obligated to pay the expenses of the commission or prizes of the lottery, and a claim for the payment of an expense of the lottery or prizes of the lottery may not be made against monies other than monies credited to the commission operating account.

(C)   The commission may purchase, lease, or lease-purchase goods or services necessary for effectuating the purposes of this chapter. The commission may make procurements which integrate functions such as lottery game design, lottery ticket distribution to a lottery retailer, supply of goods and services, and advertising. In all procurement decisions, the commission shall act to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objectives of raising net proceeds for the benefit of educational programs and purposes.

Section 59-150-320.   To ensure the financial integrity of the lottery, the commission, through its board, shall:

(1)   submit quarterly and annual reports to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the Comptroller General, the State Treasurer, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee disclosing the total lottery revenues, prize disbursements, operating expenses, and administrative expenses of the commission during the reporting period. The annual report additionally must describe the organizational structure of the commission, summarize the functions performed by each organizational division within the commission, and contain a detailed budget for the next fiscal year. The quarterly reports must be submitted within fifteen days of the end of the quarter, and the annual report must be submitted by October fifteenth;

(2)   adopt a system of internal audits;

(3)   maintain weekly or more frequently records of lottery transactions including the distribution of lottery game tickets or shares to a lottery retailer, revenues received, claims for prizes, prizes paid, prizes forfeited, and other financial transactions of the commission;

(4)   authorize the State Auditor to contract with a certified public accountant or firm for an independently audited financial statement prepared in accordance with generally accepted accounting principles, to be submitted to the Comptroller General's office each year no later


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than October fifteenth. The certified public accountant or firm shall not have a financial interest in a lottery vendor with whom the commission is under contract. The certified public accountant or firm shall evaluate the internal auditing controls in effect during the audit period. The cost of this annual financial audit is an operating expense of the commission. The State Auditor may at any time conduct an audit of any phase of the operations of the commission at the expense of the State and shall receive a copy of the annual independent financial audit. A copy of an interim audit performed by the certified public accountant or firm or the State Auditor must be transmitted after the close of the commission's fiscal year to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the State Treasurer, the Comptroller General, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee;

(5)   submit, for informational purposes only, to the Office of State Budget of the Budget and Control Board and the State Auditor by June thirtieth of each year a copy of the annual operating budget for the commission for the next fiscal year. This annual operating budget must be approved by the South Carolina Lottery Commission Board;

(6)   submit, for informational purposes only, to the Office of State Budget on November tenth of each year a proposed operating budget for the commission for the upcoming fiscal year;

(7)   adopt the same fiscal year as that used by state government; and

(8)   authorize the Legislative Audit Council to contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not have a financial interesting a lottery vendor with whom the commission is under contract The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation.

Section 59-150-330.   (A)   All claimant agencies of this State and persons on whose behalf the State and its claimant agencies act, in conjunction with the commission, shall cooperate in identifying debtors who owe money to the State and who qualify for prizes pursuant to this chapter from the commission; and the sum of any debt owed to the State or to persons on whose behalf the State and its claimant agencies


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act must be set off against a prize awarded pursuant to this chapter. This section must be liberally construed to effectuate these purposes.

(B)   As used in this section:

(1)   'Claimant agency' means any state or local agency, department, board, bureau, commission, or authority to which an individual owes a debt or which acts on behalf of an individual to collect a debt.

(2)   'Debt' means a liquidated sum due and owing a claimant agency, which sum has accrued through contract, subrogation, tort, or operation of law regardless of whether there is an outstanding judgment for the sum, or a sum which is due and owing a person and is enforceable by the State or any of its agencies or departments.

(3)   'Debtor' means an individual owing money to or having a delinquent account with a claimant agency, which obligation has not been adjudicated as satisfied by court order, set aside by court order, or discharged in bankruptcy.

(4)   'Prize' means the proceeds of a lottery prize awarded pursuant to this chapter.

(C)   The collection remedy authorized by this section is in addition to and not in substitution for any other remedy available by law.

(D)(1)   A claimant agency may submit to the commission a list of the names of all persons owing debts in excess of one hundred dollars to the claimant agency or to persons on whose behalf the claimant agency acts. The full amount of the debt is collectible from lottery winnings without regard to limitations on the amounts that may be collectible in increments through garnishment or other proceedings. The list constitutes a valid lien upon and claim of lien against the lottery winnings of a debtor named in the list. The list must contain the names of the debtors, their Social Security numbers if available, and other information which would assist the commission in identifying the debtors named in the list.

(2)   The commission shall withhold winnings subject to the lien created by this section and send notice to the winner by certified mail, return receipt requested, of such action and the reason why the winnings were withheld. If the winner appears and claims winnings in person, the commission shall notify the winner at that time, by hand delivery, of the action. If the debtor does not protest, in writing, the withholding of the funds within thirty days of notice, the commission shall pay the funds over to the claimant agency. If the debtor protests the withholding of funds, in writing, within thirty days of the notice,


Printed Page 2974 . . . . . Thursday, May 3, 2001

the commission shall file an action in interpleader in the circuit court of the county in which the debtor resides, pay the disputed sum into the court, and give notice to the claimant agency and debtor of the initiation of the action.

(3)   The liens created by this section rank among themselves as follows:

(a)   taxes due the State;

(b)   delinquent child support;

(c)   delinquent student loans; and

(d)   all other judgments and liens in order of the date entered or perfected.

(4)   The commission is not required to deduct claimed debts from prizes paid out by a lottery retailer or entities other than the commission.

(5)   A list of debtors and debts must be provided, pursuant to this section, periodically as the commission determines by rules and regulations, and the commission is not obligated to retain the lists or deduct debts appearing on the lists beyond the period determined by the rules and regulations.

(6)   The commission may prescribe forms, propose rules, and promulgate regulations necessary to carry out the provisions of this section.

(7)   The commission and a claimant agency do not incur civil or criminal liability for good faith adherence to the provisions of this section.

(8)   The claimant agency shall pay the commission for all costs incurred by the commission in setting off debts in the manner provided in this section. The commission may retain this fee as part of administrative expenses.

(E)(1)   Notwithstanding Section 59-150-240 or other confidentiality law, the commission may provide to a claimant agency all information necessary to accomplish and effectuate the intent of this section.

(2)   The information obtained by a claimant agency from the commission pursuant to this section must retain its confidentiality and may be used only by a claimant agency in the pursuit of its debt collection duties and practices. An employee or former employee of a claimant agency who unlawfully discloses this information for another purpose, except as otherwise specifically authorized by law, is subject to penalties as provided by law.


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(F)   The provisions of this section apply to prizes of six hundred dollars or more.

Section 59-150-340.   The net proceeds received from the state lottery for education as provided by law must be deposited by the State Treasurer in a fund separate and distinct from the state general fund entitled the 'Education Lottery Account'. All interest or income earned by the fund must be retained in the account and used for its stated purposes. However, all revenue received by the Education Lottery Account in any fiscal year together with earnings on it for that year must be disbursed as required by Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. It is the intent of the General Assembly in creating this Education Lottery Account that its funds be managed so as to establish and fund these programs permanently. Upon receipt of monies transferred to the Education Lottery Account held by the State Treasurer, these monies must be appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the programs and for the purposes stipulated in Section 59-150-350. The Comptroller General shall record these revenues received on a cash basis, and disbursements for the purposes provided also must be on a cash basis; however, unexpended funds at the end of a fiscal year after disbursement to the programs authorized to receive the funds as provided in Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years may be carried forward to future years and expended for the same purposes.

Section 59-150-350.   (A)   All lottery proceeds are the property of the commission, to be held in a separate and distinct account, apart from the State Treasury. Annual administrative expenses may not exceed fifteen percent of gross lottery revenues for the year, including lottery retailer commissions and incentives. The commission shall provide the Education Lottery Account, through the operating funds of the commission, monies in the amount of at least one hundred thirty thousand dollars for the Commission on Higher Education and at least one hundred twenty-five thousand for the Administrative Law Judge Division, both to help defray their expenses incurred in the performance of their duties pursuant to this chapter; except that the amount of funding for the Commission on Higher Education and the Administrative Law Judge Division, at least one hundred thirty


Printed Page 2976 . . . . . Thursday, May 3, 2001

thousand dollars and one hundred twenty-five thousand dollars, respectively, must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. As nearly as practical, an amount no less than forty-five percent of the amount of money from the actual sale of lottery tickets or shares must be made available as prize money, except that this item does not create a lien, an entitlement, a cause of action, or other private right, and rights of holders of tickets or shares must be determined by the commission in setting the terms of its lottery or lotteries.

(B)   Before the sixteenth day of each month, the commission shall deposit to the State Treasurer, for credit to the Education Lottery Account for the preceding month, the amount of all net proceeds from the preceding month. The State Comptroller General shall account separately for net proceeds by establishing and maintaining a restricted account known as the Education Lottery Account. Upon their deposit with the State, monies representing a deposit of net proceeds become the unencumbered property of the State of South Carolina and the commission may not agree or undertake otherwise. The monies may be invested by the State Treasurer pursuant to state investment practices. All earnings attributable to the investments are also the unencumbered property of the State and accrue to the credit of the Education Lottery Account.

(C)   At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds. Appropriations from the Education Lottery Account must be allocated only for educational purposes and programs by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated to full funding of the LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as provided in Sections 59-149-10(E) and 59-149-50(D), and funding with all the remaining revenues for: elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement


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legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences, and Youth Education Scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations bill, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child. These programs may include, but are not limited to, language and literacy programs that help the child understand and tell stories, recognize pictures and words, learn the alphabet, and understand that writing is communication; math concepts that teach the child to count and sort objects into groups, recognize shapes, and make comparisons of size, shape, length, and weight; science concepts that teach the child to explore the natural environment, observe seasonal changes, communicate observations, and use tools to measure; art concepts that help the child express ideas and thoughts in creative ways, paint, draw, and sculpt, listen to music and sing songs, and recognize colors; and physical development activities that help the child move with balance and coordination, participate in indoor and outdoor physical activity, and use writing tools, puzzles, scissors, blocks, clay, and computers. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.

(D)   Appropriations by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years for educational purposes and programs from the account not committed during the fiscal year must be credited to the Education Lottery Account.


Printed Page 2978 . . . . . Thursday, May 3, 2001

(E)(1)   A program or project started specifically from lottery proceeds may not be continued from the general fund, but the programs must be adjusted or discontinued according to available lottery proceeds, unless the General Assembly by general law establishes eligibility requirements and later appropriates specific funds within the general appropriations act. The provisions of this subsection do not prohibit the providing of supplemental funding to programs or projects in existence on the effective date of this chapter from lottery proceeds; provided, that funding for these existing programs or projects from the state general fund, the Education Improvement Act, or other nonlottery sources may not be reduced below that provided on the effective date of this chapter.

(2)   A surplus in the Education Lottery Account may not be reduced by the General Assembly to correct any nonlottery deficiencies in sums available for general appropriations and vice versa, and a surplus in the Education Lottery Account may not be included in a surplus calculated for setting aside any nonlottery reserve, specifically, without limitation, the General Reserve Fund or the Capital Reserve Fund.
SECTION   3.   Section 59-149-10 of the 1976 Code is amended by adding at the end to read:

"(E)(1)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as defined in this chapter is increased to the cost of tuition for thirty credit hours a year or its equivalent plus a three hundred dollar a year book allowance. Tuition for this purpose means the amount charged for registering for credit hours of instruction and shall not include other fees, charges, or costs of textbooks except for the referenced three hundred dollar book allowance.

(2)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year independent institution must continue to be the cost of attendance up to a maximum of three thousand dollars a year, and the annual amount for eligible resident students attending a two-year independent institution must increase to the cost of attendance up to a maximum of no more than the cost of tuition at a two-year regional public institution for thirty credit hours a year or its equivalent.

(3)   Beginning with the school year 2002-2003, the requirement that high school completion be accomplished on or after May 1995, for eligibility for the LIFE Scholarship is waived."


Printed Page 2979 . . . . . Thursday, May 3, 2001

SECTION   4.   Section 59-149-50 of the 1976 Code is amended by adding subsections (D) and (E) to read:

"(D)   Beginning with school year 2002-2003, an entering freshman to be eligible for a LIFE Scholarship in addition to the other requirements of this chapter shall meet two of the following three criteria:

(1)   have the grade point average required by this section;

(2)   have the Scholastic Aptitude Test (SAT) or equivalent ACT score required by this section;

(3)   be in the top thirty percent of his high school graduating class.

For home school students and students whose high school graduating class is less than fifty students, the Commission on Higher Education may define alternative criteria for students to meet the requirement of item (3).

After receipt of a LIFE Scholarship by an entering freshman beginning with school year 2002-2003, a student shall meet the criteria established in this chapter to retain or regain the scholarship.

(E)   Notwithstanding the provisions of this section and the other requirements of this chapter, beginning with school year 2002-2003, students attending a technical college of this State taking not less than eighteen credit hours of instruction a year but less than thirty credit hours a year who are otherwise eligible for a LIFE scholarship shall receive a LIFE scholarship equal to one-half the amount that eligible students receive at the technical college who take at least thirty credit hours of instruction a year."
SECTION   5.   The 1976 Code is amended by adding:

"Section 2-15-63.   (A)   Beginning in December 2004 and every three years after that, the Legislative Audit Council shall conduct a management performance audit of the South Carolina Lottery Commission. The cost of this audit, up to one hundred thousand dollars, is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the management performance audit.

(B)   Nothing in this section limits, abridges, or otherwise affects the provisions of Section 2-15-60.

(C)   The Legislative Audit Council may contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not


Printed Page 2980 . . . . . Thursday, May 3, 2001

have a financial interest in a lottery vendor with whom the commission is under contract. The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation."
SECTION   6.   Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item to read:

"( )   a lottery ticket sold pursuant to Chapter 150 of Title 59;"
SECTION   7.   Section 59-63-210 of the 1976 Code is amended to read:

"Section 59-63-210.   (A)   Any district board of trustees may authorize or order the expulsion, suspension, or transfer of any pupil for a the commission of any crime, gross immorality, gross misbehavior, persistent disobedience, or for violation of written rules and promulgated regulations established by the district board, county board, or the State Board of Education, or when the presence of the pupil is detrimental to the best interest of the school. Every Each expelled pupil shall have has the right to petition for readmission for the succeeding school year. Expulsion or suspension shall must be construed to prohibit a pupil from entering the school, or school grounds, except for a prearranged conference with an administrator, attending any day or night school functions, or riding a school bus. The provisions of this section shall do not preclude enrollment and attendance in any adult or night school.

(B)   A district board of trustees shall not authorize or order the expulsion, suspension, or transfer of any pupil for a violation of Section 59-150-250(B)."
SECTION   8.   Except for Section 59-150-350(C), (D), and (E), provisions of this chapter relating to guidelines for the appropriation of lottery proceeds must not be amended in a general appropriations act, but only in a separate piece of legislation solely for that purpose and by a majority vote of those present and voting in both houses of the General Assembly.
SECTION   9.   The General Assembly shall review and evaluate, on a regular basis but at least biannually, the operation of the South Carolina Education Lottery and the success and efficiency with which the South Carolina Lottery Commission has undertaken that responsibility. The General Assembly, after each review and evaluation, may determine to:

(1)   transfer the whole or any part of the functions of the commission to the jurisdiction and control of any other agency;

(2)   consolidate, coordinate, or combine the functions of the commission with any other agency;


Printed Page 2981 . . . . . Thursday, May 3, 2001

(3)   redirect any mission of the commission;

(4)   abolish any mission of the commission in whole or any part; or

(5)   abolish all or any part of the functions of the commission.
SECTION   10.   Criminal penalties contained in Chapter 150, Title 59 apply only to offenses committed on or after the effective date of this act.
SECTION   11.   The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release, or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision so expressly provides. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION   12.   If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding does not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective; except that Section 59-150-40(A) through (L), Section 59-150-60(A)(17) and (19), and Section 59-150-350 are hereby declared by the General Assembly to be nonseverable from each other and a finding of invalidity or ineffectiveness for whatever reason of any of those cited sections renders the other of the cited sections invalid or ineffective.
SECTION   13.   Upon approval by the Governor, this act takes effect upon ratification of the amendment to Section 7, Article XVII of the Constitution of this State. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. HARRELL explained the amendment.


Printed Page 2982 . . . . . Thursday, May 3, 2001

Rep. JENNINGS spoke against the amendment.

SPEAKER PRO TEMPORE IN CHAIR

Rep. WILKINS spoke in favor of the amendment.
Rep. CARNELL spoke against the amendment.
Rep. FLEMING spoke in favor of the amendment.

MOTION NOTED

Rep. BARRETT moved to reconsider the vote whereby H. 3307 (Word version) was rejected and the motion was noted.

Rep. WILKINS moved cloture on the entire matter.

Rep. SCOTT demanded the yeas and nays which were taken, resulting as follows:

Yeas 67; Nays 51

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Barrett                Bingham                Brown, J.
Campsen                Cato                   Chellis
Coates                 Cooper                 Cotty
Dantzler               Easterday              Edge
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Klauber
Knotts                 Koon                   Law
Leach                  Limehouse              Littlejohn
Loftis                 Lucas                  Martin
McGee                  Merrill                Owens
Perry                  Quinn                  Rice
Riser                  Rodgers                Sandifer
Scarborough            Sharpe                 Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Thompson
Townsend               Trotter                Vaughn
Walker                 Webb                   White

Printed Page 2983 . . . . . Thursday, May 3, 2001

Wilder                 Wilkins                Young, A.
Young, J.

Total--67

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, G.              Brown, R.              Carnell
Clyburn                Coleman                Davenport
Delleney               Emory                  Freeman
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Kennedy                Kirsh                  Lee
Lloyd                  Lourie                 Mack
McCraw                 McLeod                 Miller
Moody-Lawrence         Neal, J.H.             Neal, J.M.
Ott                    Parks                  Phillips
Rhoad                  Rivers                 Rutherford
Scott                  Sheheen                Simrill
Smith, J.E.            Snow                   Tripp
Weeks                  Whatley                Whipper

Total--51

So, cloture was ordered.

SPEAKER IN CHAIR

Rep. JENNINGS spoke against the amendment.
Rep. W. D. SMITH spoke in favor of the amendment.

Rep. RUTHERFORD moved to table the amendment.

Rep. GOVAN demanded the yeas and nays which were taken, resulting as follows:

Yeas 43; Nays 69


Printed Page 2984 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allen                  Askins                 Bowers
Breeland               Brown, G.              Brown, R.
Carnell                Clyburn                Emory
Freeman                Gourdine               Govan
Harvin                 Hayes                  Hines, J.
Hines, M.              Hosey                  Howard
Jennings               Kennedy                Kirsh
Lee                    Lloyd                  Lourie
Mack                   McCraw                 McLeod
Miller                 Moody-Lawrence         Neal, J.H.
Neal, J.M.             Parks                  Phillips
Rivers                 Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Weeks                  Whatley                Whipper
Wilder

Total--43

Those who voted in the negative are:

Allison                Altman                 Bales
Barfield               Barrett                Bingham
Campsen                Cato                   Chellis
Coates                 Coleman                Cooper
Cotty                  Dantzler               Davenport
Delleney               Easterday              Edge
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Hinson                 Huggins                Keegan
Kelley                 Klauber                Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McGee                  Owens
Perry                  Quinn                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Simrill                Sinclair               Smith, D.C.
Smith, J.R.            Smith, W.D.            Snow
Stille                 Stuart                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Vaughn

Printed Page 2985 . . . . . Thursday, May 3, 2001

Walker                 Webb                   White
Wilkins                Young, A.              Young, J.

Total--69

So, the House refused to table the amendment.

The question then recurred to the adoption of the amendment.

Rep. SCOTT demanded the yeas and nays which were taken, resulting as follows:

Yeas 73; Nays 38

Those who voted in the affirmative are:

Allison                Altman                 Bales
Barfield               Barrett                Bingham
Campsen                Cato                   Chellis
Coates                 Coleman                Cooper
Cotty                  Dantzler               Davenport
Delleney               Easterday              Edge
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Hinson                 Huggins                Keegan
Kelley                 Klauber                Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McGee                  Owens
Perry                  Quinn                  Rhoad
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough
Sharpe                 Sheheen                Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Smith, W.D.            Snow
Stille                 Stuart                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilder                 Wilkins                Young, A.
Young, J.

Total--73


Printed Page 2986 . . . . . Thursday, May 3, 2001

Those who voted in the negative are:
Allen                  Askins                 Battle
Bowers                 Breeland               Brown, R.
Carnell                Clyburn                Cobb-Hunter
Emory                  Freeman                Gourdine
Govan                  Harvin                 Hines, J.
Hines, M.              Hosey                  Howard
Jennings               Kennedy                Kirsh
Lee                    Lloyd                  Lourie
Mack                   McCraw                 McLeod
Miller                 Moody-Lawrence         Ott
Parks                  Phillips               Rivers
Scott                  Smith, J.E.            Weeks
Whatley                Whipper

Total--38

So, the amendment was adopted.

Rep. STILLE proposed the following Amendment No. 2 (Doc Name COUNCIL\SWB\AMEND\5400DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50(D)(2), by striking item (2) in its entirety and inserting:
/ (2)   have the Scholastic Aptitude Test (SAT) score of 1000 or equivalent ACT score required by this section. /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment, which was agreed to.

Rep. STILLE proposed the following Amendment No. 3 (Doc Name COUNCIL\SWB\AMEND\5401DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50, by adding a new subparagraph appropriately numbered to read:
/ ( )   Lottery LIFE scholarships may be awarded for only eight semesters or a maximum of one hundred forty credit hours attempted. /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment, which was agreed to.


Printed Page 2987 . . . . . Thursday, May 3, 2001

Rep. STILLE proposed the following Amendment No. 4 (Doc Name COUNCIL\SWB\AMEND\5402DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50, by adding a new subparagraph appropriately numbered to read:
/ ( )   Students awarded scholarships who do not attain a B average must repay the lottery scholarship program one-half of the amount awarded for that previous semester. /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE explained the amendment.

Rep. J. E. SMITH spoke against the amendment.

Rep. HARRELL moved to table the amendment.

Rep. J. E. SMITH demanded the yeas and nays which were taken, resulting as follows:

Yeas 81; Nays 12

Those who voted in the affirmative are:

Allen                  Askins                 Bales
Barfield               Bingham                Breeland
Brown, J.              Brown, R.              Campsen
Carnell                Chellis                Clyburn
Dantzler               Davenport              Delleney
Easterday              Edge                   Emory
Fleming                Frye                   Gilham
Govan                  Harrell                Harrison
Harvin                 Hayes                  Hines, J.
Hines, M.              Hinson                 Hosey
Howard                 Huggins                Jennings
Keegan                 Kelley                 Kennedy
Kirsh                  Klauber                Koon
Leach                  Limehouse              Lloyd
Lourie                 Lucas                  Mack
McGee                  McLeod                 Miller
Moody-Lawrence         Neal, J.H.             Ott
Owens                  Perry                  Quinn
Rice                   Riser                  Rivers
Rodgers                Sandifer               Scarborough

Printed Page 2988 . . . . . Thursday, May 3, 2001

Sharpe                 Sheheen                Simrill
Smith, D.C.            Smith, G.M.            Smith, J.E.
Smith, J.R.            Snow                   Talley
Taylor                 Thompson               Townsend
Tripp                  Weeks                  Whatley
Whipper                White                  Wilder
Wilkins                Young, A.              Young, J.

Total--81

Those who voted in the negative are:

Barrett                Cato                   Coleman
Cooper                 Littlejohn             Loftis
Martin                 Neal, J.M.             Rutherford
Sinclair               Stille                 Walker

Total--12

So, the amendment was tabled.

Rep. SCOTT moved that the House do now adjourn.

Rep. SCOTT demanded the yeas and nays which were taken, resulting as follows:

Yeas 17; Nays 79

Those who voted in the affirmative are:

Bowers                 Breeland               Brown, R.
Coleman                Harvin                 Hines, M.
Hosey                  Jennings               Kennedy
Littlejohn             Lloyd                  McLeod
Rivers                 Rutherford             Scott
Sheheen                Smith, J.E.

Total--17

Those who voted in the negative are:

Allison                Altman                 Askins
Bales                  Barfield               Barrett
Battle                 Bingham                Brown, J.
Campsen                Cato                   Chellis

Printed Page 2989 . . . . . Thursday, May 3, 2001

Coates                 Cooper                 Cotty
Dantzler               Davenport              Delleney
Easterday              Edge                   Emory
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Kirsh
Klauber                Koon                   Law
Leach                  Limehouse              Loftis
Lourie                 Lucas                  Martin
McGee                  Miller                 Neal, J.M.
Ott                    Owens                  Parks
Perry                  Phillips               Quinn
Rhoad                  Rice                   Riser
Rodgers                Sandifer               Scarborough
Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Thompson
Tripp                  Trotter                Walker
Weeks                  Whatley                White
Wilder                 Wilkins                Young, A.
Young, J.

Total--79

So, the House refused to adjourn.

Rep. MCLEOD moved that the House recede until 2:30 p.m.

Rep. RUTHERFORD demanded the yeas and nays which were taken, resulting as follows:

Yeas 14; Nays 85

Those who voted in the affirmative are:

Allen                  Askins                 Breeland
Govan                  Hosey                  Mack
McLeod                 Miller                 Rutherford

Printed Page 2990 . . . . . Thursday, May 3, 2001

Scott                  Smith, J.E.            Snow
Weeks                  Whipper

Total--14

Those who voted in the negative are:

Altman                 Bales                  Barfield
Barrett                Battle                 Bingham
Bowers                 Brown, J.              Campsen
Carnell                Cato                   Chellis
Coates                 Coleman                Cooper
Cotty                  Dantzler               Davenport
Delleney               Edge                   Emory
Fleming                Freeman                Frye
Gilham                 Gourdine               Hamilton
Harrell                Harrison               Harvin
Haskins                Hinson                 Huggins
Jennings               Keegan                 Kelley
Kirsh                  Klauber                Knotts
Koon                   Law                    Leach
Limehouse              Loftis                 Lourie
Lucas                  Martin                 McCraw
McGee                  Ott                    Owens
Parks                  Phillips               Quinn
Rhoad                  Rice                   Riser
Rivers                 Rodgers                Sandifer
Scarborough            Sharpe                 Sheheen
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Stille                 Stuart                 Talley
Taylor                 Thompson               Tripp
Trotter                Vaughn                 Walker
Webb                   Whatley                White
Wilder                 Wilkins                Young, A.
Young, J.

Total--85

So, the House refused to recede.


Printed Page 2991 . . . . . Thursday, May 3, 2001

Rep. STILLE proposed the following Amendment No. 5 (Doc Name COUNCIL\SWB\AMEND\5403DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50, by adding a new subparagraph appropriately numbered to read:
/ ( )   Students awarded scholarships who do not attain a B average must repay the lottery scholarship program all of the amount awarded for that previous semester. /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment.

Rep. SCOTT demanded the yeas and nays which were taken, resulting as follows:

Yeas 98; Nays 1

Those who voted in the affirmative are:

Allen                  Allison                Altman
Askins                 Bales                  Barfield
Barrett                Battle                 Bingham
Bowers                 Breeland               Brown, G.
Brown, J.              Brown, R.              Campsen
Carnell                Cato                   Chellis
Coates                 Coleman                Cooper
Cotty                  Dantzler               Davenport
Delleney               Easterday              Edge
Freeman                Frye                   Gilham
Gourdine               Govan                  Hamilton
Harrell                Harvin                 Haskins
Hinson                 Hosey                  Huggins
Jennings               Keegan                 Kelley
Kennedy                Kirsh                  Klauber
Knotts                 Koon                   Law
Leach                  Lee                    Limehouse
Lloyd                  Loftis                 Lourie
Lucas                  Martin                 McCraw
McGee                  McLeod                 Owens
Parks                  Perry                  Quinn
Rice                   Riser                  Rodgers
Rutherford             Sandifer               Scarborough
Scott                  Sharpe                 Sheheen

Printed Page 2992 . . . . . Thursday, May 3, 2001

Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.E.            Smith, J.R.
Smith, W.D.            Snow                   Stille
Stuart                 Talley                 Taylor
Thompson               Townsend               Tripp
Trotter                Vaughn                 Walker
Webb                   Weeks                  Whatley
Whipper                White                  Wilder
Wilkins                Young, J.

Total--98

Those who voted in the negative are:

Littlejohn

Total--1

So, the amendment was tabled.

Rep. STILLE proposed the following Amendment No. 6 (Doc Name COUNCIL\SWB\AMEND\5398DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50(D)(3), by striking the word /thirty/ and inserting the word /twenty/ between /top/ and /percent/ in item (3).
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment.

Rep. JENNINGS demanded the yeas and nays, which were not ordered.

The amendment was then tabled by a division vote of 71 to 0.

Rep. KENNEDY moved to continue the Bill.

Rep. KENNEDY demanded the yeas and nays which were taken, resulting as follows:

Yeas 21; Nays 79


Printed Page 2993 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allen                  Breeland               Brown, G.
Edge                   Freeman                Gourdine
Harvin                 Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Kennedy                Lee                    Lloyd
Mack                   McLeod                 Neal, J.H.
Scott                  Sheheen                Whipper

Total--21

Those who voted in the negative are:

Allison                Altman                 Bales
Barfield               Barrett                Bingham
Bowers                 Brown, J.              Campsen
Carnell                Cato                   Chellis
Coates                 Cooper                 Cotty
Dantzler               Delleney               Easterday
Fleming                Frye                   Gilham
Govan                  Hamilton               Harrell
Harrison               Haskins                Huggins
Keegan                 Klauber                Knotts
Koon                   Law                    Leach
Limehouse              Littlejohn             Loftis
Lourie                 Lucas                  Martin
McCraw                 McGee                  Moody-Lawrence
Owens                  Perry                  Rhoad
Rice                   Riser                  Rivers
Robinson               Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, F.N.
Smith, G.M.            Smith, J.E.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Thompson
Townsend               Tripp                  Trotter
Vaughn                 Walker                 Webb
Weeks                  Whatley                White
Wilder                 Wilkins                Young, A.
Young, J.

Total--79


Printed Page 2994 . . . . . Thursday, May 3, 2001

So, the House refused to continue the Bill.

Rep. STILLE proposed the following Amendment No. 7 (Doc Name COUNCIL\SWB\AMEND\5396DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 2, Section 59-150-70(1), by striking item (1) in its entirety and inserting:

/ (1)   type of lottery games as described in Section 59-150-20(7). The lottery games may include the selling of lottery game tickets or shares except that the game or activity in which the winner is selected must not be based upon the outcome of a football, basketball, baseball, or similar game or sports event; /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment.

Rep. SCOTT demanded the yeas and nays, which were not ordered.

The amendment was then tabled.

Rep. STILLE proposed the following Amendment No. 8 (Doc Name COUNCIL\SWB\AMEND\5397DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 2, Section 59-150-110(A), by striking the word /shall/ and inserting the word /may/ between /Governor/ and /appoint/ in the first sentence of subsection (A).
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment, which was agreed to.

Rep. STILLE proposed the following Amendment No. 9 (Doc Name COUNCIL\SWB\AMEND\5399DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50(D)(1), by striking item (1) in its entirety and inserting:
/ (1)   have a grade point average of B or better required by this section. /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment.


Printed Page 2995 . . . . . Thursday, May 3, 2001

Rep. JENNINGS demanded the yeas and nays which were taken, resulting as follows:

Yeas 80; Nays 6

Those who voted in the affirmative are:

Allen                  Barfield               Barrett
Battle                 Bingham                Breeland
Brown, G.              Brown, J.              Campsen
Carnell                Cato                   Chellis
Coates                 Coleman                Cooper
Cotty                  Dantzler               Davenport
Delleney               Easterday              Edge
Fleming                Freeman                Gilham
Gourdine               Govan                  Hamilton
Harrell                Haskins                Hayes
Hines, J.              Hines, M.              Hinson
Hosey                  Jennings               Keegan
Kelley                 Kirsh                  Klauber
Knotts                 Law                    Limehouse
Lourie                 Lucas                  McCraw
McGee                  McLeod                 Moody-Lawrence
Ott                    Owens                  Parks
Perry                  Phillips               Quinn
Rice                   Rodgers                Sandifer
Scarborough            Sharpe                 Sheheen
Simrill                Sinclair               Smith, D.C.
Smith, F.N.            Smith, G.M.            Smith, J.E.
Smith, J.R.            Snow                   Stille
Talley                 Taylor                 Thompson
Tripp                  Trotter                Webb
Weeks                  Whatley                Whipper
White                  Young, J.

Total--80

Those who voted in the negative are:

Harvin                 Kennedy                Lloyd
Mack                   Miller                 Scott

Total--6


Printed Page 2996 . . . . . Thursday, May 3, 2001

So, the amendment was tabled.

RULE 3.9 INVOKED

Rep. SCOTT moved that Rule 3.9 be invoked. The motion was seconded by ten members and the SPEAKER ordered that the absent members be sent for.

RULE 3.9 RESCINDED

Rep. KLAUBER moved to rescind Rule 3.9.

The yeas and nays were taken resulting as follows:

Yeas 83; Nays 29

Those who voted in the affirmative are:

Allison                Altman                 Askins
Bales                  Barfield               Barrett
Battle                 Bingham                Brown, G.
Brown, R.              Campsen                Cato
Chellis                Coates                 Cobb-Hunter
Coleman                Cooper                 Cotty
Dantzler               Davenport              Delleney
Easterday              Edge                   Emory
Freeman                Frye                   Gilham
Hamilton               Harrell                Harrison
Harvin                 Hines, J.              Hinson
Huggins                Keegan                 Kelley
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McCraw                 McGee
Miller                 Neal, J.H.             Neal, J.M.
Owens                  Perry                  Phillips
Quinn                  Rice                   Riser
Robinson               Rodgers                Sandifer
Scarborough            Sheheen                Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Stille                 Stuart
Talley                 Taylor                 Thompson
Townsend               Tripp                  Trotter
Vaughn                 Walker                 Webb

Printed Page 2997 . . . . . Thursday, May 3, 2001

Whatley                White                  Wilkins
Young, A.              Young, J.

Total--83

Those who voted in the negative are:

Allen                  Bowers                 Breeland
Carnell                Gourdine               Govan
Hayes                  Hines, M.              Hosey
Jennings               Kennedy                Kirsh
Lee                    Lloyd                  Lourie
Mack                   McLeod                 Moody-Lawrence
Ott                    Parks                  Rivers
Rutherford             Scott                  Smith, F.N.
Smith, J.E.            Snow                   Weeks
Whipper                Wilder

Total--29

So, Rule 3.9 was rescinded.

Rep. STILLE proposed the following Amendment No. 10 (Doc Name COUNCIL\GGS\AMEND\22046MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-150(A) as contained in SECTION 2, second sentence, by deleting / sixty / and inserting / thirty /
Amend title to conform.

Rep. STILLE explained the amendment.

Rep. J. E. SMITH spoke against the amendment.

Rep. HARRELL moved to table the amendment.

Rep. KENNEDY demanded the yeas and nays which were taken, resulting as follows:

Yeas 85; Nays 18

Those who voted in the affirmative are:

Allen                  Askins                 Bales
Barfield               Battle                 Bingham

Printed Page 2998 . . . . . Thursday, May 3, 2001

Bowers                 Breeland               Brown, J.
Brown, R.              Carnell                Chellis
Clyburn                Coates                 Coleman
Cooper                 Cotty                  Dantzler
Easterday              Edge                   Emory
Freeman                Frye                   Gilham
Govan                  Harrell                Harrison
Harvin                 Hayes                  Hines, J.
Hines, M.              Hinson                 Hosey
Huggins                Jennings               Keegan
Kirsh                  Klauber                Knotts
Koon                   Law                    Lee
Limehouse              Lloyd                  Lourie
Lucas                  Mack                   McCraw
McGee                  McLeod                 Miller
Moody-Lawrence         Owens                  Parks
Perry                  Phillips               Quinn
Rice                   Riser                  Rivers
Sandifer               Scarborough            Scott
Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, F.N.            Smith, G.M.
Smith, J.E.            Smith, J.R.            Snow
Talley                 Taylor                 Thompson
Walker                 Webb                   Weeks
Whatley                Whipper                White
Wilder                 Wilkins                Young, A.
Young, J.

Total--85

Those who voted in the negative are:

Barrett                Brown, G.              Cato
Davenport              Delleney               Hamilton
Haskins                Kennedy                Leach
Littlejohn             Neal, J.M.             Robinson
Rodgers                Sheheen                Stille
Stuart                 Tripp                  Vaughn

Total--18

So, the amendment was tabled.


Printed Page 2999 . . . . . Thursday, May 3, 2001

Rep. STILLE proposed the following Amendment No. 11 (Doc Name COUNCIL\GGS\AMEND\22048MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-230(I) as contained in SECTION 2, by deleting in its entirety and inserting:
/   (I)   Unclaimed prize money must be deposited in the Education Lottery Account each year. At least one percent of the gross total prize money in the Education Lottery Account must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the South Carolina Department of Alcohol and Other Drug Abuse Services for the treatment of compulsive gambling disorder and educational programs related to that disorder, including a gambling hotline. If unclaimed prize money does not amount to at least five hundred thousand dollars in any one year of operation, the commission shall provide the Education Lottery Account, through the operating funds of the commission, the monies for DAODAS for the provision of those services, in an amount equal to the difference between the unclaimed prize monies and at least five hundred thousand dollars; except that the amount of funding for DAODAS, at least five hundred thousand dollars, must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. The Director of the DAODAS shall report to the board on the programs implemented with these funds, and provide a copy of the report to the General Assembly. /
Amend title to conform.

Rep. STILLE moved to table the amendment.

Rep. JENNINGS demanded the yeas and nays which were taken, resulting as follows:

Yeas 78; Nays 7

Those who voted in the affirmative are:

Allen                  Askins                 Bales
Barfield               Barrett                Battle
Bingham                Bowers                 Breeland
Brown, R.              Cato                   Chellis
Clyburn                Coates                 Coleman
Cooper                 Cotty                  Dantzler
Delleney               Easterday              Emory
Freeman                Frye                   Gilham

Printed Page 3000 . . . . . Thursday, May 3, 2001

Hamilton               Harrell                Harvin
Haskins                Hines, J.              Hines, M.
Hinson                 Hosey                  Huggins
Jennings               Keegan                 Kirsh
Koon                   Leach                  Limehouse
Lloyd                  Lucas                  McCraw
McGee                  Miller                 Moody-Lawrence
Neal, J.M.             Parks                  Perry
Phillips               Quinn                  Rhoad
Rice                   Rodgers                Sandifer
Scarborough            Sharpe                 Sheheen
Simrill                Smith, D.C.            Smith, G.M.
Smith, J.R.            Stille                 Stuart
Talley                 Taylor                 Thompson
Tripp                  Vaughn                 Walker
Webb                   Weeks                  Whatley
Whipper                White                  Wilder
Wilkins                Young, A.              Young, J.

Total--78

Those who voted in the negative are:

Govan                  Kennedy                Loftis
Lourie                 McLeod                 Robinson
Smith, J.E.

Total--7

So, the amendment was tabled.

Rep. GOVAN moved that the House do now adjourn.

Rep. KENNEDY demanded the yeas and nays which were taken, resulting as follows:

Yeas 19; Nays 69

Those who voted in the affirmative are:

Allen                  Allison                Battle
Bowers                 Breeland               Brown, G.
Brown, R.              Govan                  Hayes
Hines, M.              Hosey                  Jennings

Printed Page 3001 . . . . . Thursday, May 3, 2001

Littlejohn             McLeod                 Miller
Scott                  Smith, F.N.            Smith, J.E.
Weeks

Total--19

Those who voted in the negative are:

Altman                 Bales                  Barfield
Barrett                Bingham                Cato
Chellis                Clyburn                Coates
Coleman                Cooper                 Cotty
Dantzler               Davenport              Delleney
Easterday              Emory                  Freeman
Frye                   Gilham                 Gourdine
Hamilton               Harrell                Haskins
Hinson                 Huggins                Keegan
Kennedy                Kirsh                  Knotts
Koon                   Leach                  Limehouse
Loftis                 Lourie                 Lucas
McCraw                 McGee                  Moody-Lawrence
Neal, J.M.             Owens                  Perry
Phillips               Quinn                  Rhoad
Rice                   Riser                  Sandifer
Scarborough            Sharpe                 Sheheen
Simrill                Smith, D.C.            Smith, G.M.
Smith, J.R.            Stuart                 Talley
Taylor                 Thompson               Trotter
Vaughn                 Walker                 Webb
Whatley                White                  Wilder
Wilkins                Young, A.              Young, J.

Total--69

So, the House refused to adjourn.

Rep. STUART proposed the following Amendment No. 12 (Doc Name COUNCIL\DKA\AMEND\4402MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-350(C), SECTION 2, by inserting after /clay, and computers./ in the penultimate sentence, the following sentence to read:


Printed Page 3002 . . . . . Thursday, May 3, 2001

/ Funds also must be allocated, in an amount determined by the General Assembly in the annual general appropriations bill, to the Department of Education for the purchase of new school buses, supplemental to any bond bills authorizing the purchase of new school buses. /
Amend title to conform.

Rep. STUART explained the amendment.

Rep. STUART moved to table the amendment, which was agreed to.

Rep. HARRELL proposed the following Amendment No. 13 (Doc Name COUNCIL\DKA\AMEND\4436MM01):
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION   1.   The General Assembly finds that:

(1)   net proceeds of lottery games conducted pursuant to this chapter must be used to support improvements and enhancements for educational purposes and programs as provided by the General Assembly and that the net proceeds must be used to supplement, not supplant, existing resources for educational purposes and programs;

(2)   lottery games are an entrepreneurial enterprise and that the State shall create an instrumentality of the State and public body, corporate and politic, known as the South Carolina Lottery Commission, with the comprehensive and extensive powers as generally exercised by commissions engaged in entrepreneurial pursuits;

(3)   lottery games must be operated and managed in a manner which ensures that the lottery is operated with integrity and dignity and free of political influence, maximizes the use of revenues, and provides continuing entertainment to the public;

(4)   the South Carolina Lottery Commission must be accountable to the General Assembly and to the public through a system of audits and reports; and

(5)   this act is not a bill appropriating money out of the State Treasury as contemplated by Section 21 of Article IV of the Constitution of this State and, therefore, is not subject to a line item or section objection or veto by the Governor. It is the intent of the General Assembly that this act merely specify the educational purposes and programs, and parameters, for funding by the General Assembly


Printed Page 3003 . . . . . Thursday, May 3, 2001

through the annual general appropriations bill or any bill appropriating monies for previous or current fiscal years.
SECTION   2.   Title 59 of the 1976 Code is amended by adding:

"CHAPTER 150
South Carolina Education Lottery Act

Section 59-150-10.   This chapter may be cited as the 'South Carolina Education Lottery Act'.

Section 59-150-20.   As used in this chapter:

(1)   'Administrative expenses' means operating expenses, excluding amounts set aside for prizes, regardless of whether the prizes are claimed, and excluding amounts held as a fidelity fund pursuant to Section 59-150-170.

(2)   'Board' means the Board of Commissioners of the South Carolina Lottery Commission.

(3)   'Commission' means the South Carolina Lottery Commission.

(4)   'Educational purposes and programs' means educational expenses and scholarships as defined in Section 59-150-350(C).

(5)   'Executive director' means the Executive Director of the South Carolina Lottery Commission or his designee.

(6)   'Immediate family' means a person who is:

(a)   a spouse;

(b)   a child residing in the same household; or

(c)   claimed as a dependent for income tax purposes.

(7)   ''Lottery', 'lotteries', 'lottery game', or 'lottery games' means a game of chance approved by the General Assembly and operated pursuant to this chapter including, but not limited to, instant tickets, on-line lottery games, and drawing numbers, but excluding keno, pari-mutuel betting, and casino gambling as defined in this section. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50. The access and use of an electronic or a mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and his employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense anything other than lottery tickets.

As used in this item, 'casino gambling' means a location or business for the purpose of conducting unlawful gambling activities, but excluding the sale and purchase of lottery game tickets or shares; and 'pari-mutuel betting' means a method or system of wagering on


Printed Page 3004 . . . . . Thursday, May 3, 2001

actual races including races involving horses or dogs at tracks and the distribution of winnings by pools.

(8)   'Lottery retailer' means a person who sells lottery game tickets or shares on behalf of the South Carolina Lottery Commission pursuant to a contract.

(9)   'Lottery vendor' means a person who provides or proposed to provide goods or services to the South Carolina Lottery Commission pursuant to a procurement contract, but does not include an employee of the commission, a lottery retailer, or a state agency or instrumentality of the State. The term includes a corporation whose shares are traded publicly and which is the parent company of the contracting party in a procurement contract.

(10)   'Major procurement contract' means a gaming product or service costing in excess of seventy-five thousand dollars including, but not limited to, major advertising contracts, annuity contracts, prize payment agreements, consulting services, equipment, tickets, and other products and services unique to the South Carolina lottery but not including materials, supplies, equipment, and services common to the ordinary operations of a business.

(11)   'Member' or 'members' means a Commissioner or Commissioners of the Board of the South Carolina Lottery Commission.

(12)   'Minority business' means a business which meets the definition of a socially and economically disadvantaged small business as described in Article 21, Chapter 35, Title 11, specifically a small business concern which:

(a)   is at least fifty-one percent owned by one or more citizens of the United States who are determined to be socially and economically disadvantaged;

(b)   in the case of a concern which is a corporation, at least fifty-one percent of all classes of voting stock of such corporation is owned by an individual determined to be socially and economically disadvantaged; or

(c)   in the case of a concern which is a partnership, at least fifty-one percent of the partnership interest is owned by an individual or individuals determined to be socially and economically disadvantaged or whose management and daily business operations are controlled by individuals determined to be socially and economically disadvantaged. Those individuals must be involved in the daily management and operations of the business concerned.


Printed Page 3005 . . . . . Thursday, May 3, 2001

'Small business' as used in this item means a business which meets the definition of a small business for purposes of the Small Business Administration, an agency of the United States.

(13)   'Net proceeds' means all revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery games, less operating expenses and prizes.

(14)   'Operating expenses' means all costs of doing business including, but not limited to, prizes, commissions, and other compensation paid to a lottery retailer, advertising and marketing costs, rental fees, personnel costs, capital costs, depreciation of property and equipment, funds for compulsive gambling education and treatment, amounts held in or paid from a fidelity fund pursuant to Section 59-150-170, and other operating costs, including funds to the Commission on Higher Education and the Administrative Law Judge Division toward their expenses incurred in performance of their duties pursuant to this chapter.

(15)   'Person' means an individual, corporation, partnership, unincorporated association, or other legal entity.

(16)   'Prize' means an award, gift, or anything of value regardless of whether there are conditions or restrictions attached to its receipt.

(17)   'Proceeds' means all lottery revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery or received by the commission.

(18)   'Share' means intangible evidence of participation in a lottery game.

(19)   'Ticket' means tangible evidence issued by the South Carolina Lottery Commission to provide participation in a lottery game.

Section 59-150-30.   (A)   There is created a commission to be known as the South Carolina Lottery Commission, which is deemed to be a public commission and an instrumentality of the State. The commission and its employees are subject to the South Carolina Consolidated Procurement Code, South Carolina Administrative Procedures Act, South Carolina Ethics Reform Act, and South Carolina Freedom of Information Act. Venue for the commission is in Richland County.

(B)   Beginning in December 2004 and every three years after that, or by legislative request, the Legislative Audit Council shall conduct a management performance audit of the commission. The cost of this audit is an operating expense of the commission.


Printed Page 3006 . . . . . Thursday, May 3, 2001

Section 59-150-40.   (A)   The commission is governed by a board composed of nine members to be appointed as follows: three members must be appointed by the Governor, three members must be appointed by the President Pro Tempore of the Senate, and three members must be appointed by the Speaker of the House of Representatives.

(B)   A member must:

(1)   be a resident of the State of South Carolina;

(2)   not have been convicted of a felony offense or bookmaking or other form of unlawful gambling. A background investigation must be conducted on each board nominee. The commission shall pay for the cost of the investigation and may contract with the State Law Enforcement Division (SLED) or appropriate federal agency for the performance of the investigation;

(3)   meet the qualifications for electors as provided in Section 7-5-120;

(4)   not have been an elected public official, as provided in Section 24, Article III of the Constitution of this State and Section 2-1-100, for at least two years before appointment; and

(5)   have been screened by a panel pursuant to procedures it establishes and found by the panel to meet the statutory qualifications and considerations for appointment to the board. The Governor, Speaker of the House of Representatives, and the President Pro Tempore of the Senate each shall submit the names of his potential board appointees to the panel. If the panel finds the potential appointee meets or does not meet the statutory qualifications, it shall notify the appointing authority who submitted the name. A potential appointee found not statutorily qualified by the panel may not be appointed to the board. The screening panel is composed of ten members: five selected by the President Pro Tempore of the Senate and five selected by the Speaker of the House of Representatives. The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each select three members of their respective bodies and two members from the public to serve on the screening panel. The members of the panel serve four-year terms. The investigation and consideration by the panel of a potential appointee is limited to the statutory qualifications established pursuant to this chapter. A panel member may be removed upon unanimous vote of the appointing authorities, or for cause by his appointing authority for malfeasance, incompetency, conflict of interest, misconduct, persistent neglect of duty in office, or incapacity.


Printed Page 3007 . . . . . Thursday, May 3, 2001

(C)   In making appointments to the board, the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives, as appropriate, shall consider legal, financial, accounting, and marketing experience and race, gender, and other demographics factors to ensure nondiscrimination, inclusion, and representation of all segments of the State to the greatest extent possible.

(D)   The members shall serve terms of three years, except that of the initial appointments the Governor shall appoint two members, each to serve a two-year term, and one member to serve a four-year term; the Speaker of the House of Representatives shall appoint three members, each to serve a two-year term, co-terminus with the Speaker; and the President Pro Tempore of the Senate shall appoint three members, each to serve an initial four-year term. A vacancy that occurs on the board must be filled by appointment by the Governor, the President Pro Tempore of the Senate, or the Speaker of the House of Representatives, as appropriate, for the remainder of the unexpired term.

(E)   A member shall not serve on the board if he is an officer or employee of the commission or if he has an immediate family member employed by the commission.

(F)   A member of the board may receive per diem, subsistence, and mileage at the rate provided by law for members of state boards, committees, and commissions.

(G)   The board shall elect from their membership officers of the board, including the chair.

(H)   The board may delegate to the executive director of the commission those powers and duties it considers proper.

(I)   A majority of members in office or at least five members, whichever is greater, constitutes a quorum for the transaction of business and for the exercise of a power or function of the commission.

(J)   Action may be taken and motions and resolutions adopted by the board at a board meeting by affirmative vote of a majority of present and voting board members. This subsection does not relieve the board from the requirements of the South Carolina Freedom of Information Act.

(K)   A vacancy in the membership of the board does not impair the right of the members to exercise all the powers and perform all the duties of the board.

(L)   A member is appointed to the board for a term and may be removed from the board before the expiration of his term only upon


Printed Page 3008 . . . . . Thursday, May 3, 2001

unanimous vote of the appointing authorities, or for cause by his appointing authority for malfeasance, incompetency, conflict of interest, misconduct, persistent neglect of duty in office, or incapacity.

(M)   A member of the board shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

Section 59-150-50.   The board shall:

(1)   approve, disapprove, amend, or modify the budget recommended by the executive director for the operation of the commission;

(2)   approve, disapprove, amend, or modify the terms of procurements recommended by the executive director;

(3)   hear appeals of hearings required by this chapter;

(4)   promulgate regulations and adopt policies and procedures regulating the conduct of lottery games pursuant to the Administrative Procedures Act and as specified in Section 59-150-60(A)(19); and

(5)   perform other functions specified by this chapter.

Section 59-150-60.   (A)   The commission has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter which are not in conflict with the Constitution and laws of this State and which generally are exercised by commissions engaged in entrepreneurial pursuits on behalf of the State including, but not limited to, the powers to:

(1)   sue and be sued in contract and in tort and to complain and defend in all courts, subject to the South Carolina Tort Claims Act;

(2)   adopt and alter a corporate seal and symbol;

(3)   promulgate regulations and adopt policies and procedures for the regulation of its affairs and the conduct of its business; to elect and prescribe the duties of officers and employees of the commission; and to perform other matters as the commission may determine;

(4)   procure or to provide self-insurance;

(5)   hold copyrights, trademarks, and service marks and enforce its rights with respect to them;

(6)   organize, initiate, supervise, and administer the operation of the lottery as provided by this chapter and regulations promulgated and policies and procedures adopted pursuant to this chapter;


Printed Page 3009 . . . . . Thursday, May 3, 2001

(7)   enter into written agreements with one or more other states for the operation, participation in marketing, and promotion of a joint lottery or joint lottery games;

(8)   conduct necessary or appropriate market research, which may include an analysis of the demographic characteristics of the players of the lottery game and an analysis of advertising, promotion, public relations, incentives, and other aspects of communication;

(9)   acquire or lease real property and make improvements on it and acquire by lease or by purchase personal property including, but not limited to, computers; mechanical, electronic, and on-line equipment and terminals; and intangible property including, but not limited to, computer programs, systems, and software. To achieve cost savings and efficiency, the commission shall use the telecommunications network service of the Budget and Control Board's Office of Information Resources pursuant to Sections 1-11-430 and 11-35-1580 provided that the commission certifies that the service is secure;

(10)   administer oaths, take depositions, issue subpoenas, and compel the attendance of witnesses and the production of books, papers, documents, and other evidence relative to any investigation or proceeding conducted by the commission;

(11)   appoint, select, or hire officers, agents, and employees, including professional and administrative staff, personnel, and hearing officers to conduct hearings required by this chapter, and to fix their compensation and pay their expenses. Notwithstanding another provision of law, the commission has exclusive authority to contract for legal services. All employees of the commission are employees-at-will and are eligible for participation in the South Carolina Retirement System and may elect optional retirement program coverage in the same manner as provided in Section 9-20-10(2)(a), the State Health Insurance Group plans, and are encompassed by the South Carolina Tort Claims Act;

(12)   make pension payments to the South Carolina Retirement System or other system approved by the State Retirement System and pay contributions to the Office of Insurance Services for dental and health plans on behalf of personnel or employees employed by the commission who qualify in the same manner as other state employees in the executive branch of government;

(13)   select and contract with a lottery vendor and a lottery retailer;


Printed Page 3010 . . . . . Thursday, May 3, 2001

(14)   enter into contracts or agreements with state or other law enforcement agencies for the performance of law enforcement, background investigations, and security checks;

(15)   enter into contracts on such terms and conditions as the commission may determine, except that the commission shall not enter into contracts to incur debt in its own name or enter into financing agreements with the State, agencies, or instrumentalities of the State, or with a commercial bank or credit provider; however, necessary start-up monies may be borrowed from the Insurance Reserve Fund of the Budget and Control Board, subject to the loan repayment terms of the Budget and Control Board, for effectuating its purpose, including payment of the initial expenses of initiation, administration, and operation of the commission and the lottery, if and only if sufficient start-up monies are not appropriated from the general fund;

(16)   enter into contracts of any type on the terms and conditions the commission determines, except that it may not enter into a contract with an entity for the purpose of having that entity assume or otherwise undertake the organization and conduct of the lottery;

(17)   advertise and promote the lottery and lottery games in a dignified manner befitting the State, but only in compliance with the same state and federal standards of truth in advertising which govern private advertisers engaged in interstate commerce and including the restrictions described in this item. The board shall review, at least quarterly, all past lottery advertising and proposed concepts for major media campaigns to ensure that the advertising did not and does not target with the intent to exploit specific ethnic groups or economic classes of people, and that the content is accurate and not misleading. The commission shall promote fair and responsible play, including disclosure of the odds of winning, and shall ensure that any advertising used does not exhort the public to bet by misrepresenting, directly or indirectly, a person's chance of winning a prize. The commission may use interviews, pictures, or statements from people who have won lottery prizes to show that prizes are won and awarded. If the board finds that advertising conflicts with these policies, the board shall cause the cessation of that advertising;

advertising and promotion of the lottery and lottery games as defined in Section 59-150-20(7) is restricted to: expenditure of not more than one-half of one percent of gross lottery revenues; contracts of one year or less and awarded by the board after competitive bidding; information about how the game is played; identification of amounts or recipients, or both of them, of funding from the proceeds of ticket


Printed Page 3011 . . . . . Thursday, May 3, 2001

sales; explanation of the permitted uses of lottery proceeds; probability of winning; an entertainment context; encouragement of responsible play; information about recognizing and seeking treatment for compulsive gambling; sites and methods designed to reach the responsible adult player; and advertisements and promotions placed exclusively by the commission in newspapers or periodicals or on the commission official web site;

advertising and promotion of the lottery and lottery games must not include: inducements to play; targeting with the intent to exploit specific ethnic groups or economic classes of people; representations of the game as an investment or the answer to financial concerns; exaggeration of odds of winning; the name or image, or both, of an elected official, or the State Seal or its likeness; praise of a lottery player or denigration of a nonplayer; implication that the game is one of skill; suggestion that the lottery player is contributing money for the good of the State; any advertising outside of the lottery retailer's business premises; and advertising in connection with or at the site of a public school or institution of higher learning or sponsorship of an activity at a public school or institution of higher learning;

lottery advertising and promotion also: must include posting of warnings of the dangers and risks of gambling, and the odds of winning, on a three by two foot sign in a conspicuous location in all lottery retailer facilities; must otherwise encourage responsible decision making regarding lottery play by adults, discourage abusive use of the lottery product; and, other than as permitted in the provisions of this chapter for the commission and the lottery retailer, may not be undertaken by another entity or individual;

(18)   act as a lottery retailer, conduct promotions which involve the dispensing of lottery game tickets or shares, and establish and operate a sales facility to sell lottery game tickets or shares and related merchandise, except that the commission shall not establish, operate, or authorize a lottery sales facility at any state Welcome Center or state rest area; and

(19)   promulgate regulations and adopt and amend policies and procedures as necessary to carry out and implement its powers and duties, organize and operate the commission, regulate the conduct of lottery games as defined in Section 59-150-20(7), and other matters necessary or desirable for the efficient and effective operation of the lottery for the convenience of the public. The promulgation of the regulations and adoption of the policies and procedures are subject to the requirements of the Administrative Procedures Act.


Printed Page 3012 . . . . . Thursday, May 3, 2001

(B)   The powers enumerated in subsection (A) are cumulative of and in addition to those powers enumerated elsewhere in this chapter, and do not limit or restrict other powers of the commission.

(C)   The commission is prohibited from distributing monies other than as prescribed by this chapter including, but not limited to, the prohibition of contributing to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); and the prohibition of making an independent expenditure to advance or defeat a measure related to the lottery.

(D)   The commission is not authorized to use any machine specifically prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   The commission is subject to the limitations upon, and exemptions from, liability and damages provided in the South Carolina Tort Claims Act.

(F)   The commission shall not issue, sell, or authorize the sale of lottery tickets or shares at a location licensed to provide deferred presentment services pursuant to Chapter 39 of Title 34.

(G)   The commission shall not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and the commission may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section 2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the commission.

(H)   The commission may not sell or give away tickets for promotional purposes.

Section 59-150-70.   In accordance with the Administrative Procedures Act, the board may promulgate regulations and adopt policies and procedures regulating the conduct of lottery games in general; except the commission may promulgate temporary regulations and adopt policies and procedures to implement the provisions of this chapter which must be consistent with this chapter, except as otherwise provided in this section. The commission shall have tickets available for purchase by the public no later than November 1, 2001, or as soon as practicable. These temporary regulations, polices, and procedures are not considered regulations as defined by the Administrative Procedures Act; however, these temporary regulations, policies, and procedures have the force and effect of law. The only lottery games that may be played pursuant to these temporary regulations, policies,


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and procedures are instant tickets, dollar tickets, and dollar joint- or multi-state lottery games. The commission shall submit regulations to the General Assembly for review in accordance with the Administrative Procedures Act at the January 15, 2002, legislative session. The temporary regulations authorized in this section are repealed on July 15, 2004, or on the effective date of regulations promulgated pursuant to the Administrative Procedures Act, whichever date occurs first. If regulations promulgated pursuant to the Administrative Procedures Act have not taken effect by July 15, 2004, the commission may promulgate the temporary regulations authorized by this section as emergency regulations pursuant to Section 1-23-130. For purposes of this section, the circumstances required for emergency regulations in Section 1-23-130(A) do not apply, but all other provisions of Section 1-23-130 are applicable. The regulations, policies, and procedures must specify, but are not limited to specifying, the:

(1)   type of lottery games as described in Section 59-150-20(7). The lottery games may include the selling of lottery game tickets or shares or the use of electronic or mechanical devices, except those electronic or mechanical devices prohibited by Section 59-150-20(7), and except that the game or activity in which the winner is selected must not be based upon the outcome of a football, basketball, baseball, or similar game or sports event;

(2)   sale price of lottery game tickets or shares and the manner of sale, except that all sales must be for cash only. Payment by checks, credit cards, charge cards, or other form of deferred payment and payment by debit card are prohibited;

(3)   number and amount of prizes;

(4)   method and location of selecting or validating winning lottery game tickets or shares;

(5)   manner and time of payment of prizes, which may include lump sum payments or installments over a period of years, except that the State is not liable for the nonpayment of a prize;

(6)   manner of payment of prizes by a lottery retailer to the holders of a winning lottery game ticket or share including, without limitation, provision for payment of prizes not exceeding six hundred dollars after deducting the price of the lottery game ticket or share and after performing validation procedures appropriate to the game and as specified by the board;

(7)   frequency of lottery games and drawings or selection of winning lottery game tickets or shares;


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(8)   means of conducting drawings, except that an elected or appointed official, other than the members of the board or its designee, must not preside or appear at a drawing, and except that the drawing may be aired publicly only by means of a public service announcement and carried by any news outlet that makes public service time available for that purpose;

(9)   method to be used in selling lottery game tickets or shares, which may include the use of electronic or mechanical devices, but the devices must be placed on the premises of the lottery retailer in a location which is only accessible to the lottery retailer or his employees;

(10)   manner and amount of compensation to a lottery retailer within the limits of this chapter;

(11)   other matters necessary or desirable toward ensuring the efficient and effective operation of lottery games as defined in Section 59-150-20(7), the continued entertainment and convenience of the public, and the integrity of the lottery.

Section 59-150-80.   (A)   The board shall appoint and provide for the compensation of an executive director who must be an employee of the commission and who directs the day-to-day operations and management of the commission and is vested with powers and duties specified by the board and by law. The executive director serves at the pleasure of the board.

(B)   The board shall hire and provide for the compensation of an internal auditor and necessary staff who must be employees of the commission and who are vested with the powers and duties specified by the board and by law. The internal auditor shall report directly to the board.

Section 59-150-90.   (A)   The executive director of the commission shall direct and supervise all administrative and technical activities as provided for in this chapter, according to the terms and conditions as may be established by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years and with the regulations promulgated and policies and procedures adopted by the board. It is the duty of the executive director to facilitate the initiation and supervise and administer the operation of the lottery games as defined in Section 59-150-20(7); employ and direct necessary personnel; employ by contract and compensate necessary persons and firms, except that the contract may not be with an entity for the purpose of having that entity undertake the organization and conduct of the lottery; promote or provide for


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promotion of the lottery and functions related to the commission; prepare a budget for the approval of the board; require bond from a lottery retailer and a lottery vendor in amounts required by the board; report monthly to the State Auditor and the board a full and complete statement of lottery revenues and expenses for the preceding month; and perform other duties generally associated with an executive director of a commission of an entrepreneurial nature.

(B)   The executive director for good cause may suspend, revoke, or refuse to renew a contract entered into as provided by the provisions of this chapter or the regulations, policies, and procedures of the board.

(C)   The executive director or his designee may conduct hearings and administer oaths to persons for the purpose of assuring the security or integrity of lottery operations or to determine the qualifications of or compliance by a lottery vendor and a lottery retailer.

(D)   The executive director shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

Section 59-150-100.   (A)   The commission shall establish and maintain a personnel program for its employees and fix the compensation and terms of compensation of its employees.

(B)   An employee of the commission or an immediate family member of an employee of the commission, as defined in Section 59-150-20(6), may not have a financial interest in a lottery vendor doing business or proposing to do business with the commission and is otherwise subject to the South Carolina Ethics Reform Act.

(C)   An employee of the commission who has decision-making authority shall not participate in a decision involving a lottery retailer with whom the employee has an economic interest as defined in the South Carolina Ethics Reform Act.

(D)   Notwithstanding any other provision of law, an employee of the commission who leaves his employment may not represent a lottery vendor or lottery retailer before the commission for a period of two years following termination of employment with the commission.

(E)   A background investigation must be conducted on each applicant who has reached the final selection process before employment by the commission at the level of division director and above and at any level within any division of security and as otherwise required by the board. The commission shall pay for the actual cost of


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the investigations and may contract with SLED for the performance of the investigations. The results of a background investigation are not a record open to the public pursuant to the Freedom of Information Act.

(F)   A person who has been convicted of a felony or bookmaking or other forms of illegal gambling or of a crime involving moral turpitude may not be employed by the commission.

(G)   The commission shall bond commission employees who have access to commission funds or lottery revenue in an amount provided by the board and may bond other employees as necessary.

Section 59-150-110.   (A)   The Governor shall appoint a Lottery Retailer Advisory Board to be composed of ten lottery retailers, representing the broadest possible spectrum of geographical, racial, gender, and business characteristics of a lottery retailer. The Governor also shall appoint the chairman of the advisory board. The function of the advisory board is to advise the lottery board on retail aspects of the lottery and to present the concerns of a lottery retailer throughout the State. The advisory board may establish a consumer representatives committee to help provide additional insight on other aspects of lottery retail sales.

(B)   Members appointed to the advisory board serve terms of two years, except that four of the initial lottery retailer appointees serve initial terms of one year and five serve initial terms of two years. The chairman of the advisory board serves co-terminus with the Governor.

(C)   The advisory board shall establish its own rules and internal operating procedures. Members of the advisory board serve without compensation or the per diem, subsistence, or mileage provided by law for members of state boards, committees, and commissions. The advisory board may report to the board of commissioners in writing at any time. The board of commissioners may invite the advisory board to make an oral presentation to the commissioners at regular meetings of the board.

Section 59-150-120.   The commission shall provide training programs and other educational activities to enable small and minority businesses to compete for contracts on an equal basis. The board shall monitor the results of small and minority business participation and shall report the results of small and minority business participation to the State Human Affairs Commission on at least an annual basis pursuant to Section 1-13-110.

Section 59-150-130.   (A)   In coordination with SLED, the commission shall investigate the financial responsibility, security, and integrity of a lottery vendor who is a finalist in submitting a bid,


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proposal, or offer as part of a procurement. To defray a portion of the expense of this investigation, each lottery vendor finalist shall submit a certified check for five thousand dollars to the commission. This sum must be placed in an escrow account from which SLED must be paid to conduct the investigation pursuant to this section. If five thousand dollars is not sufficient to complete the investigation, the commission shall require the lottery vendor finalist to remit additional funds. Any funds remaining in the escrow account after the investigation is complete must be returned to the lottery vendor finalist. At the time of submitting the bid, proposal, or offer to the commission, the commission shall require disclosure of the:

(1)   lottery vendor's name and address and, as applicable, the names and addresses of the following, if the lottery vendor is:

(a)   a corporation, the officers and directors and each stockholder in the corporation, except that in the case of owners of equity securities of a publicly-traded corporation, the names and addresses of only those known to the corporation to own beneficially five percent or more of the securities must be disclosed;

(b)   a trust, the trustee and all persons entitled to receive income or benefits from the trust;

(c)   an association, the members, officers, and directors; and

(d)   a partnership or joint venture, all of the general partners, limited partners, or joint venturers;

(2)   states and jurisdictions in which the lottery vendor does business and the nature of the business for each such state or jurisdiction;

(3)   states and jurisdictions in which the lottery vendor has contracts to supply gaming goods or services including, but not limited to, lottery goods and services, and the nature of the goods or services involved for each state or jurisdiction;

(4)   states and jurisdictions in which the lottery vendor has applied for, sought renewal of, received, been denied, or had revoked, or has issuance pending of, a lottery or gaming license of any kind or had fines or penalties assessed to his license, contract, or operation and the disposition of each in each state or jurisdiction. If a lottery or gaming license or contract has been revoked or has not been renewed or a lottery or gaming license or application has been denied or is pending and has remained pending for more than six months, all of the facts and circumstances underlying the failure to receive a license must be disclosed;


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(5)   details of a finding or any plea, conviction, or adjudication of guilt in a state or federal court of the lottery vendor for a felony or other criminal offense other than a traffic violation. A fingerprint exemplar may be required to satisfy this item;

(6)   details of any bankruptcy, insolvency, reorganization, or corporate or individual purchase or takeover of another corporation, including bonded indebtedness, or pending litigation of the lottery vendor;

(7)   contributions made to the campaign of a candidate for the General Assembly or statewide constitutional office, to any political party, as defined in Section 8-13-1300(26), or to a committee, as defined in Section 8-13-1300(6), or independent expenditures made to advance or defeat a measure related to the lottery for the twelve-month period before the application and up to the date of disqualification of the applicant or the awarding of the contract, whichever occurs first; and

(8)   additional information the commission determines appropriate for the procurement involved.   If at least twenty percent of the cost of a lottery vendor's contract is subcontracted, the lottery vendor shall disclose all of the information required by this section for the subcontractor as if the subcontractor were itself a lottery vendor.

(B)   A lottery procurement contract must not be entered into with a lottery vendor who has not complied with the disclosure requirements described in subsection (A), and a contract with a noncomplying lottery vendor is voidable at the option of the commission. The commission may terminate a contract with a lottery vendor who does not comply with the requirements for periodically updating the disclosures during the time specified in the contract. The provisions of this section must be construed broadly and liberally to achieve the ends of full disclosure of all information necessary to allow for a full and complete evaluation by the commission of the competence, integrity, background, and character of a lottery vendor for procurements.

(C)   A procurement contract must not be entered into with a lottery vendor who has been found guilty of a felony related to the security or integrity of the lottery in this or any other jurisdiction.

(D)   A procurement contract must not be entered into with a lottery vendor if the lottery vendor has an ownership interest in an entity that supplied consultation services under contract to the commission regarding the request for proposals pertaining to those particular goods or services.


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(E)   A lottery vendor or applicant for a major procurement contract may not pay, give, or otherwise make available an economic opportunity, gift, loan, gratuity, special discount, favor, hospitality, or service, excluding food and beverages having an aggregate value not exceeding twenty-five dollars in one day or two hundred dollars in a calendar year, or any other thing of value, to the executive director, a board member, or an employee of the commission or to a member of his immediate family residing in the same household. For purposes of this subsection all terms are used as defined in Section 8-13-100.

(F)   A lottery vendor who has entered into the competitive solicitation process for a procurement contract or has been awarded a procurement contract with the commission shall not contribute, for a period of twelve months before entering into the procurement process, except that during the first twelve months the period must be from the date of enactment, and during the term of the contract, to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

(G)   A former public official holding public office, a former public member holding public membership, or a former public employee having public employment on or after the effective date of this chapter may not serve a lottery vendor for a period of two years after terminating his public service or employment.

(H)   A lottery vendor may not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and a lottery vendor may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section 2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the lottery vendor.

(I)   A lottery vendor may not advertise or promote the lottery or its business relationship with the commission.

(J)   A lottery vendor that is a contractor with the State or any agency, commission, or department of the State shall disclose, upon written inquiry, the amount of any commission, referral fee, finder's fee, consulting fee, contingency fee, or other monies paid in connection with obtaining the contract and the name of the person to whom the monies were paid.

(K)   The prohibitions and restrictions described in item (A)(7) and subsections (F) and (H) specifically apply to a lottery vendor as defined


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in Section 59-150-20(9) and its employees, members of its board, and holders of an interest in it of more than ten percent, and their immediate family members, as defined in Section 59-150-20(6).

(L)   If a court of competent jurisdiction rules that item (A)(7) or subsection (F) or (H) are unconstitutional or otherwise unenforceable, then the commission is prohibited from entering into a contract with a lottery vendor if the fee or commission payable in connection with the contract is based on sales or profitability.

Section 59-150-140.   (A)   At the execution of the contract with the commission, a lottery vendor shall post a performance bond or letter of credit from a bank or credit provider acceptable to the commission in an amount determined by the commission for that particular bid or contract. Instead of the bond, a lottery vendor, to assure the faithful performance of its obligations, may deposit and maintain with the commission securities that are interest bearing or accruing and that are rated in one of the three highest classifications by an established nationally recognized investment rating service. Securities eligible pursuant to this section are limited to:

(1)   certificates of deposit issued by solvent banks or savings associations which are organized and existing under the laws of this State or under the laws of the United States and are approved by the commission;

(2)   United States bonds, notes, and bills for which the full faith and credit of the government of the United States is pledged for the payment of principal and interest; and

(3)   corporate bonds approved by the commission. The corporation that issued the bonds must not be an affiliate or subsidiary of the depositor. The securities must be held in trust and must have at all times a market value equal at least to the full amount estimated to be paid annually to the lottery vendor under contract.

(B)   Each lottery vendor must be qualified to do business in this State and shall file appropriate tax returns as provided by the laws of this State. All contracts pursuant to this section are governed by the laws of this State.

(C)   A contract may not be let with a lottery vendor in which a public official has an ownership interest unless the letting of the contract complies with Section 8-13-775.

(D)   Procurement contracts must be handled in accordance with the South Carolina Consolidated Procurement Code.

(E)   In all contracts entered into in connection with this chapter, the resident lottery vendor preference provided in Section 11-35-1524


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must apply to procurements made by the commission, except that the following additional provisions apply:

(1)   the preference also must apply to the procurement of services, as defined in Section 11-35-310(29), and advertising;

(2)   with respect to the procurement of services or advertising, the definition of the term 'resident lottery vendor' must be modified as provided in this item. Section 11-35-1524(B)(6)(c) does not apply to a lottery vendor providing services or advertising. Instead of Section 11-35-1524(B)(6)(c), the lottery vendor shall provide services or advertising which are representative of the general type of services or advertising on which the bid is submitted;

(3)   with respect to the procurement of services or advertising, instead of providing the certifications provided in Section 11-35-1524(C), the lottery vendor shall certify in writing in the bid:

(a)   that he is resident of the State;

(b)   the services or advertising is available; and

(c)   the cost of the services or advertising is not unreasonable.

Section 59-150-150.   (A)   The commission shall develop and maintain a statewide network of lottery retailers to serve the public convenience and promote the sale of tickets or shares and the playing of lottery games as defined in Section 59-150-20(7) while ensuring the integrity of the lottery operations, games, and activities. A lottery retailer's sales of lottery tickets or shares may not exceed sixty percent annually of its total business as measured by gross revenues. The Department of Revenue shall provide data concerning a lottery retailer's gross revenues to assist the commission in verifying compliance with this provision. The commission also shall provide a small retailer a chance to participate in the sales of lottery tickets or shares; provide for compensation to a lottery retailer in the form of commissions in an amount of not more than seven percent of gross sales and not more than a one percent incentive for cashing winning tickets for prizes less than six hundred dollars; and issue a license to each person with whom it contracts as a lottery retailer for purposes of display. Each lottery retailer shall post and display conspicuously its license on the disclosure sign required by Section 59-150-60(A)(17). A license is not assignable or transferable.

(B)   The board shall develop a list of objective criteria upon which the qualification of a lottery retailer must be based. Separate criteria must be developed to govern the selection of a lottery retailer of instant tickets and an on-line lottery retailer. In developing these


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criteria, the board shall consider factors such as the applicant's financial responsibility, integrity, and reputation, and the security of the applicant's place of business or activity, and accessibility to the public. The board shall not consider political affiliation or activities or monetary contributions to political organizations or candidates for public office. The criteria must include, but is not limited to, the following:

(1)   The applicant must be current in filing all applicable tax returns to the State of South Carolina and in payment of all taxes, interest, and penalties owed to the State of South Carolina, excluding items under formal appeal pursuant to applicable statutes. The Department of Revenue shall provide this information to the commission.

(2)   A person, partnership, unincorporated association, corporation, or other business entity must not be selected as a lottery retailer if he or it:

(a)   has been convicted of a criminal offense related to the security or integrity of the lottery in this or another jurisdiction;

(b)   has been convicted of unlawful gambling activity, false statements, false swearing, or perjury in this or another jurisdiction or convicted of a crime punishable by more than one year of imprisonment or a fine of more than one thousand dollars, or both, unless the person's civil rights have been restored and at least five years have elapsed from the date of the completion of the sentence without a subsequent conviction of a crime described in this subitem;

(c)   has been found to have violated the provisions of this chapter or a regulation, policy, or procedure of the commission, unless either ten years have passed since the violation or the board finds the violation both minor and unintentional in nature;

(d)   is a lottery vendor or an employee or agent of a lottery vendor doing business with the commission;

(e)   resides in the same household as an officer of the commission;

(f)   has made a statement of material fact to the commission knowing the statement is false;

(g)   has a business of selling lottery tickets or shares that accounts for more than sixty percent annually of its gross revenues, except that the commission may not sell or give away lottery tickets or shares as a lottery retailer, as provided in Section 59-150-210;


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(h)   has not attained the age of twenty-one years, except that this age restriction applies only to the lottery retailer or lottery retailer applicant and not to a bona fide employee of the lottery retailer; and

(i)     has its place of business located within three hundred feet of a church, school, or playground situated within a municipality or within five hundred feet of a church, school, or playground situated outside of a municipality. These distances must be measured in a straight line, without regard to intervening structures or objects, from the nearest property line of the lot on which a building or structure is used as a lottery retailer to the nearest property line of the location of the church, school, or playground, which are defined as follows:

(i)     'church' means an establishment, other than a private dwelling, where religious services are usually conducted;

(ii)   'school' means an establishment, other than a private dwelling, where the usual processes of education are usually conducted; and

(iii)   'playground' means a place, other than grounds at a private dwelling, which is provided by the public or members of a community for recreation.

The restrictions in subitem (i) do not apply to the renewal of a license or to a new application for a location that is licensed at the time the new application is filed with the commission.

(3)   A person applying to become a lottery retailer must be charged a uniform application fee for each lottery outlet. A lottery retailer who participates in on-line lottery games must be charged a uniform application fee for each on-line outlet.

(4)   A lottery retailer contract executed pursuant to this chapter may be suspended, revoked, or terminated for good cause by the executive director or his designee if the lottery retailer is found to have violated a provision of this chapter or the regulations, policies, and procedures established by the board. Review of activities is subject to the Administrative Procedures Act.

(5)   Lottery retailer contracts may be renewable annually at the discretion of the commission, unless sooner canceled or terminated.

(6)   A lottery retailer or lottery retailer applicant shall not pay, give, or otherwise make available anything of value to a member of the board of directors of the commission in violation of provisions of the South Carolina Ethics Reform Act.

(7) A lottery retailer who enters into a contract with the commission shall file an initial certified report with the State Ethics Commission showing all contributions or donations made to a


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committee, as defined in Section 8-13-1300(6). The lottery retailer shall file additional certified reports within ten days following the end of each calendar quarter and for the duration of the contract with the commission.

Section 59-150-160.   (A)   A lottery retailer contract is not transferable or assignable. A lottery retailer shall not contract with a person for lottery goods or services except with the approval of the board.

(B)   Lottery game tickets and shares must be sold only by the lottery retailer named on the lottery retailer certificate.

(C)   A lottery retailer may not advertise or promote the lottery outside of the lottery retailer's business premises, and is restricted to the advertising and promotion as permitted in Section 59-150-60(A)(17).

Section 59-150-170.   (A)   The commission shall establish a fidelity fund separate from all other funds and shall assess each lottery retailer a one-time fee not to exceed one hundred dollars for each sales location. Monies deposited into the fund may be used to cover losses the commission may experience due to nonfeasance, misfeasance, or malfeasance of a lottery retailer. The monies may be invested by the commission pursuant to state investment practices. All earnings attributable to the investments accrue to the fund. In addition, the funds may be used to purchase blanket bonds covering the commission against losses from all a lottery retailer. At the end of each fiscal year, the commission shall pay to the Education Lottery Account any amount in the fidelity fund which exceeds five hundred thousand dollars, and the funds paid must be treated as net proceeds from the lottery.

(B)   A reserve account may be established as a general operating expense to cover amounts considered uncollectible from the a lottery retailer. The commission shall establish procedures for minimizing losses that may be experienced by reason of nonfeasance, misfeasance, or malfeasance of a lottery retailer, and shall exercise and exhaust all available options in the procedures before amounts are written off to this account.

(C)   The commission may require a lottery retailer to post an appropriate bond, as determined by the commission, using an insurance company acceptable to the commission. The amount must not exceed the applicable district sales average of lottery game tickets for two billing periods.

(D)(1)   In its discretion, the commission may allow a lottery retailer to deposit and maintain with the commission securities that are


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interest bearing or accruing. Securities eligible pursuant to this item are limited to:

(a)   certificates of deposit issued by solvent banks or savings associations organized and existing under the laws of this State or under the laws of the United States;

(b)   United States bonds, notes, and bills for which the full faith and credit of the United States is pledged for the payment of principal and interest; and

(c)   federal agency securities by an agency or instrumentality of the United States government.

(2)   The securities must be held in trust in the name of the commission.

Section 59-150-180.   (A)   A retail contract executed by the commission pursuant to this chapter must specify the reasons for which the contract may be canceled, suspended, revoked, or terminated by the commission including, but not be limited to:

(1)   a violation of this chapter, a regulation, or a policy or procedure of the commission;

(2)   failure to account accurately or timely for lottery game tickets, lottery games, revenues, or prizes as required by the commission;

(3)   fraud, deceit, or misrepresentation;

(4)   insufficient sales;

(5)   conduct prejudicial to public confidence in the lottery;

(6)   filing for or placement in bankruptcy or receivership of the lottery retailer;

(7)   a material change, as determined in the sole discretion of the commission, in a matter considered material by the commission in executing the contract with the lottery retailer; or

(8)   failure to meet any of the objective criteria established by the commission pursuant to this chapter.

(B)   If cancellation, denial, revocation, suspension, or rejection of renewal of a lottery retailer contract is in the best interest of the lottery, the public welfare, or the State of South Carolina, the executive director or his designee, in his discretion, may cancel, suspend, revoke, or terminate, after notice and a right to a hearing, a contract issued pursuant to this chapter. A hearing must be held within sixty days of notice of cancellation, suspension, revocation, or termination and conducted by the executive director or his designee. A party to the contract aggrieved by the decision of the executive director or his designee may appeal the adverse decision to the board, and then to the


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Administrative Law Judge Division, pursuant to the Administrative Procedures Act.

Section 59-150-190.   (A)   All proceeds from the sale of the lottery game tickets or shares constitute a trust fund until paid to the commission either directly or through the commission's authorized collection representative. A lottery retailer and officers of a lottery retailer's business have a fiduciary duty to preserve and account for lottery proceeds, and a lottery retailer personally is liable for all proceeds. Proceeds include unsold instant tickets received by a lottery retailer and cash proceeds of the sale of lottery products, net of allowable sales commissions and credit for lottery prizes sold or paid to winners by a lottery retailer. Sales proceeds and unused instant tickets must be delivered to the commission or its authorized collection representative upon demand.

(B)   The commission shall require a lottery retailer to place all lottery proceeds due the commission in accounts in institutions insured by the Federal Deposit Insurance Corporation (FDIC) no later than the close of the next banking day after the date of their collection by the lottery retailer until the date they are paid over to the commission. At the time of the deposit, lottery proceeds are considered the property of the commission, and a lottery retailer personally is liable for those proceeds due the commission. The commission may require a lottery retailer to establish a single separate electronic funds transfer account where available for the purpose of receiving monies from ticket or share sales, making payments to the commission, and receiving payments for the commission. Unless otherwise authorized in writing by the commission, each lottery retailer shall establish a separate bank account for lottery proceeds which must be kept separate and apart from all other funds and assets, and must not be commingled with any other funds or assets. A lottery retailer, upon the deposit of lottery proceeds in excess of insurance coverage by the FDIC, shall furnish an indemnity bond from a responsible surety company authorized to do business in this State in an amount sufficient to protect the State against loss in the event of insolvency or liquidation of the institution or for another cause. A lottery retailer, instead of the indemnity bond, may pledge as collateral for the deposits, obligations of the United States, obligations fully guaranteed both as to principal and interest by the United States, obligations of the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, the Federal Home Loan Mortgage Corporation, or general obligations of this State or a political subdivision of it. The State Treasurer shall


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exercise prudence in accepting the securities listed as collateral. The surety or collateral must be filed with the State Treasurer at time of deposit.

(C)   Proceeds from the sale of lottery game tickets or shares received by a lottery retailer who becomes insolvent or dies insolvent, are due the commission from the person or his estate in preference over all debts or demands.

(D)   A lottery retailer is not required to pay for lottery tickets or shares until the tickets or shares have been activated by the commission.

Section 59-150-200.   If a lottery retailer's rental payments for the business premises are contractually computed, in whole or in part, on the basis of a percentage of retail sales and the computation of retail sales is not defined explicitly to include sales of lottery game tickets or shares in a state operated or state managed lottery, only the compensation received by the lottery retailer from the commission may be considered the amount of the lottery retail sale for purposes of computing the rental payment.

Section 59-150-210.   (A)   A person shall not sell a lottery game ticket or share at a price other than that established by the commission. A person, other than a duly certified lottery retailer, shall not sell lottery game tickets, but a person may purchase lawfully lottery game tickets or shares and make a gift of the lottery game tickets or shares to another. The commission may designate certain agents and employees to sell lottery game tickets or shares directly to the public.

(B)   A lottery retailer shall not sell a lottery game ticket or share except from the locations listed in the lottery retailer's contract and as evidenced by the lottery retailer's certificate of authorization unless the commission authorizes, in writing, a temporary location not listed in the lottery retailer's contract.

(C)   Lottery game tickets or shares must not be sold to persons under eighteen years of age, but a person eighteen years of age or older may purchase lawfully lottery game tickets or shares and make a gift to a person of any age. If a minor lawfully receives a winning lottery game ticket, the commission may direct payment of proceeds of a lottery prize in an amount not exceeding two thousand five hundred dollars to the parent or guardian of the minor without court approval and without appointment of a conservator. In the case of a lottery prize greater than two thousand five hundred dollars and not exceeding twenty-five thousand dollars, payment must be made in accordance with the procedures outlined in Section 62-5-103 as they relate to


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distribution. In the case of a prize in an amount greater than twenty-five thousand dollars, payment must be made to a duly appointed conservator to be held for the benefit of the minor, pursuant to Section 62-5-433.

(D)   A lottery ticket or share may not be sold on the date of any general elections; within three hundred feet of a church, school, or playground, as provided in Section 59-150-150(B)(2)(i); to a lottery game other than that defined in Section 59-150-20(7); or to a lottery game with corporate sponsorship.

Section 59-150-220.   (A)(1)   Upon the theft of instant tickets, a lottery retailer shall report immediately the theft to both the local law enforcement authority and to the commission's division of security.

(2)   If tickets are stolen before the book is activated, and no tickets within the book have been sold:

(a)   the lottery retailer must be charged a nonrefundable service fee for each incident in an amount determined by the commission to cover its costs only, so long as the name of the local law enforcement agency contacted and the assigned case number are furnished promptly to the commission;

(b)   if the name of the local law enforcement agency and the assigned case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, the commission shall charge the lottery retailer in accordance with subsection (3)(b).

(3)   If tickets are stolen after the book has been activated or tickets within the book have been sold:

(a)   a lottery retailer must be charged the net sales value (retail sales value less commission) for each book, less the low tier prize values of stolen tickets not paid at the time of the incident, so long as the lottery retailer furnished the name of the local law enforcement agency and the assigned case number to the commission;

(b)   if the name of a law enforcement agency and case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, credit for the unpaid low tier prizes must not be given and the lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4)   The commission shall adjust charges described in item (3) for the following reasons:

(a)   the commission shall charge a lottery retailer the low tier prize value of tickets that are presented to the commission as claims


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subsequent to the date of the incident. The commission shall determine which prizes must be subsequently paid based upon the facts of the incident, and that amount must be charged to the lottery retailer;

(b)   the commission shall provide credit for recovered stolen tickets as follows:

(i)     the net sales value of the tickets recovered must be compared to the total value of the uncashed low tier prizes for each book of tickets. The lottery retailer shall receive credit for the greater of these two values;

(ii)   recovered tickets must be returned to the commission by the declared end of game redemption deadline or one hundred eighty days from the date of the incident, whichever is later. The game, book, and ticket number must be legible on each ticket for the lottery retailer to receive credit. If tickets are being held as evidence in a criminal investigation by a law enforcement agency, the commission shall accept a property report from that agency by the declared end of the game redemption deadline or one hundred eighty days from the date of the incident, whichever is later, detailing the game, book, and ticket number or Void If Removed Number (VIRN) for the tickets being held, as documentation to provide credit;

(iii)   recovered scratched tickets may be accepted for credit only if that condition of the tickets is identified in documentation provided to the commission by the local law enforcement agency;

(iv)   the lottery retailer shall receive no credit for recovered tickets that have been validated;

(v)   the commission shall determine the credits provided based upon the facts of the incident, and that amount must be credited to the lottery retailer.

(5)   Books reported to the commission as stolen must be marked in the commission's records to prevent validation and payment of prizes within the book.

(B)(1)   Upon the loss or damage of instant tickets, a lottery retailer immediately shall report the loss or damage to the both the local law enforcement authority and to the commission's division of security.

(2)   If tickets are damaged before the book is activated, no tickets within the book are sold, and all tickets in the book are returned to the commission, a lottery retailer may not be charged a service fee. If tickets are lost before the book is activated and no tickets within the book have been sold, a lottery retailer must be charged a nonrefundable service fee of twenty-five dollars for each incident for up to four books and five dollars for each book over four books.


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(3)   If tickets are lost or damaged after the book is activated or if tickets within the book are sold, a lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4)   Upon the written approval by the commission, the commission shall provide credit for recovered lost or damaged tickets for the net sales value of the tickets recovered.

(a)   To receive approval, the lottery retailer shall provide the facts of the incident in writing to the commission for consideration.

(b)   The written request and recovered tickets must be returned to the commission by the redemption deadline and the game, book, and ticket number must be legible on each ticket in order for the lottery retailer to receive credit.

(c)   Scratched tickets must not be accepted for credit. A scratched ticket is one that in the commission's judgment has been compromised as to the security and integrity of the ticket due to removal of latex.

(d)   Tickets identified as validated before the recovery result in no credit to the lottery retailer.

(5)   Books reported to the commission as lost or damaged must be marked as such in the commission's records to prevent validation and payment of prizes within the book.

(6)   In the event of acts of God, occurrences of nature, or other natural disasters, the commission may waive the requirements of this subsection.

Section 59-150-230.   (A)   Lottery prizes are subject to the South Carolina state income tax. Residents and nonresidents of this State who receive a lottery prize in excess of five hundred dollars are subject to a mandatory withholding of state income tax as required by law. Federal income tax must be withheld from lottery prizes in excess of five thousand dollars. Neither the State nor a county, municipality, or other political subdivision of this State may impose a tax on the sale of a lottery ticket or share or on the payment of a prize pursuant to this chapter; nor may a county, municipality, or other political or public subdivision assess an ad valorem tax against a lottery ticket or share bought or sold pursuant to this chapter.

(B)   Except as otherwise provided in this chapter, attachments, garnishments, or executions authorized and issued pursuant to law must be withheld if timely served upon the commission. This subsection does not apply to a lottery retailer.

(C)   The commission shall promulgate regulations and adopt policies and procedures to establish a system of verifying the validity


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of lottery games tickets or shares claimed to win prizes and to effect payment of prizes.

(1)   A prize, a portion of a prize, or a right of a person to a prize awarded is not assignable except as provided in this section. A prize or a portion of a prize remaining unpaid at the death of a prize winner must be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the commission with a notarized letter of direction from the settlor and no written notice of revocation has been received by the commission before the settlor's death. Following a settlor's death and before payment to a trustee, the commission shall obtain from the trustee a written agreement to indemnify and hold the commission harmless with respect to claims that may be asserted against the commission arising from payment to or through the trust. Notwithstanding any other provisions of this section, a person, pursuant to an appropriate judicial order, may be paid the prize to which a winner is entitled.

(2)   (a)   If the winner of a lottery game prize elects to receive his prize by way of deferred payments, the commission must deposit, in the same quarter as the prize was won and in a restricted account, the total amount of the prize. The deferred payments to the winner of the lottery game prize must be paid out only from that restricted account.

(b)   The restricted account provided in subitem (a) must be known as the 'Deferred Lottery Prize Payment Account'. The monies in the restricted account may be used only for the purpose of making deferred payments of a lottery game prize as elected by a prize winner. The monies in the Deferred Lottery Prize Payment Account may not be used to determine the assets of the commission, except to manifest them as encumbered.

(c)   The State Treasurer may invest the monies deposited in the Deferred Lottery Prize Payment Account as provided by law.

(3)   A prize must not be paid if it:

(a)   arises from claimed lottery game tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;

(b)   lacks captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or

(c)   fails to comply with additional specific regulations and public or confidential validation and security tests of the commission appropriate to the particular lottery game involved.


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(4)   A particular prize in a lottery game must not be paid more than once, and if more than one person is entitled to a particular prize, the sole remedy of those persons is the award to each of them of an equal share in the prize.

(5)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days, or for a multi-state lottery game within one hundred eighty days, after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter.

(D)   A prize must not be paid upon a lottery game ticket or share purchased or sold in violation of this chapter and is an unclaimed prize for purposes of this section.

(E)   The commission is discharged of all liability upon payment of a prize.

(F)   A lottery game ticket or share must not be purchased by and a prize must not be paid to a member of the board, an officer or employee of the commission, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence. A lottery game ticket or share must not be purchased by and a prize must not be paid to an officer, employee, agent, or a subcontractor of a lottery vendor, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence if he has access to confidential information that may compromise the integrity of the lottery.

(G)   A lottery prize may not be paid to a person who is incarcerated or on probation or parole. A lottery prize payment received in violation of this subsection must be returned immediately and in full to the commission.

(H)   The use of an electronic or mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and their employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense as a prize coins or currency. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40 and 16-19-50.

(I)   Unclaimed prize money must be deposited in the Education Lottery Account each year. A portion, in an amount to be determined


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by the General Assembly, of the unclaimed prize money in the Education Lottery Account, must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the South Carolina Department of Alcohol and Other Drug Abuse Services for the treatment of compulsive gambling disorder and educational programs related to that disorder, including a gambling hotline. The Director of the DAODAS shall report to the board on the programs implemented with these funds, and provide a copy of the report to the General Assembly.

Section 59-150-240.   (A)   The commission is subject to the provisions of Chapter 4, Title 30, the South Carolina Freedom of Information Act.

(B)   The commission shall perform full criminal background investigations before the execution of a lottery vendor contract.

(C)   The commission or its authorized agent shall:

(1)   conduct criminal background investigations and credit investigations on all potential a lottery retailer and employees;

(2)   supervise lottery game ticket or share validation and lottery drawings;

(3)   inspect, at times determined solely by the commission, the facilities or operations of a lottery vendor or lottery retailer to determine the integrity of the lottery vendor's product or compliance by the lottery retailer or lottery vendor with its contract;

(4)   report suspected violations of this chapter to the appropriate investigative and prosecutorial agency having jurisdiction over the violation; and

(5)   upon request, provide assistance to a solicitor, the Attorney General, or a law enforcement agency investigating a violation of this chapter.

Section 59-150-250.   (A)   A person who knowingly sells a lottery game ticket or share to a person under eighteen years of age or permits a person under eighteen years of age to play a lottery game is guilty of a misdemeanor and, upon conviction, must be fined not less than one hundred dollars nor more than five hundred dollars or be imprisoned not less than thirty days nor more than sixty days, or both, in the discretion of the court. It is an affirmative defense to a charge of a violation of this section that the lottery retailer reasonably and in good faith relied upon representation of proof of age in making the sale.

(B)   A person under eighteen years of age who knowingly purchases a lottery game ticket is guilty of a misdemeanor and, upon


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conviction, must perform twenty hours of community service or must be fined not less than one hundred dollars and not more than five hundred dollars.

(C)   A lottery ticket or share must bear a conspicuous label prohibiting the play of the game by a person under eighteen years of age.

(D)   A lottery game using an electronic or mechanical device must bear a conspicuous label prohibiting the use of the device by a person under eighteen years of age. Electronic or mechanical device does not include machines and other gaming devices including video poker and games prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   A person who is incarcerated or on probation or parole who knowingly accepts a lottery prize is guilty of a misdemeanor and, upon conviction, must be fined not less than ten dollars nor more than one hundred dollars or imprisoned for not less than two days nor more than thirty days, or both.

(F) A person who is convicted of a violation of subsection (A) subjects his employer, for a first violation, to a fine not less than one hundred dollars nor more than two hundred fifty dollars; for a second violation, to a fine not less than two hundred fifty-one dollars nor more than five hundred dollars; and for a third and subsequent violation, to a fine not less than five hundred and one dollars and immediate license revocation by the commission.

Section 59-150-260.   (A)   A person who, with intent to defraud, falsely makes, alters, forges, utters, passes, or counterfeits a state lottery game ticket is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(B)   A person who influences or attempts to influence the winning of a prize through the use of coercion, fraud, deception, or tampering with lottery equipment or materials is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(C)   A person who is convicted of a violation of subsection (A) or (B) must not be the recipient of an award of a lottery prize or a portion of a lottery prize, and is ineligible for employment by the commission.

Section 59-150-270.   (A)   A person must not knowingly or intentionally make a material false statement in an application for a license or proposal to conduct lottery activities or a material false entry in a book or record which is compiled or maintained or submitted to the board or its designee pursuant to the provisions of this chapter. A


Printed Page 3035 . . . . . Thursday, May 3, 2001

person who violates the provisions of this section is guilty of a felony and, upon conviction, must be fined not more than twenty-five thousand dollars or the dollar amount of the false entry or statement, whichever is greater, or imprisoned for not more than five years, or both.

(B)   A person who is convicted of a violation of subsection (A) also must surrender his license immediately and is ineligible to be issued a license by the commission.

Section 59-150-280.   (A)   The commission may enter into intelligence sharing, reciprocal use, or restricted use agreements with the federal government, law enforcement agencies, lottery regulation agencies, and gaming enforcement agencies of other jurisdictions which provide for and regulate the use of information provided and received pursuant to the agreement.

(B)   Records, documents, and information in the possession of the commission received pursuant to an intelligence sharing, reciprocal use, or restricted use agreement entered into by the commission with a federal department or agency, a law enforcement agency, or the lottery regulation or gaming enforcement agency of a jurisdiction are considered investigative records of a law enforcement agency and are subject to the confidentiality and disclosure policies, and must not be released without the permission of the person or agency providing the record or information, except as may be required by the Freedom of Information Act.

Section 59-150-290.   The commission shall enter into its contracts for procurements in compliance with the South Carolina Consolidated Procurement Code.

Section 59-150-300.   (A)   Any lottery retailer, lottery vendor, applicant for a lottery retailer license, or lottery game ticket holder aggrieved by an action of the board may appeal that decision to the Administrative Law Judge Division. The action is subject to review by an administrative law judge on the record of the board, upon petition of the aggrieved person within ten days from receipt of official notice from the board of the action of which review is sought. Service of notice is presumed conclusively ten days after mailing by registered or certified mail to the applicant or licensee of notice at his last known address. An appeal to the Administrative Law Judge Division pursuant to this section is a contested case as defined by the Administrative Procedures Act, and subject to the procedural due process requirements provided for in Article 5, Chapter 23, Title 1 and the Rules of Procedure of the Administrative Law Judge Division. Appeals


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regarding lottery vendor contracts must be brought pursuant to the South Carolina Procurement Code.

(B)   The Administrative Law Judge Division shall hear appeals from decisions of the board and, based upon the record of the proceedings before the board, may reverse the decision of the board only if the appellant proves the decision to be:

(1)   in violation of constitutional or statutory provisions;

(2)   in excess of the statutory authority of the board;

(3)   made upon unlawful procedure;

(4)   affected by other error of law;

(5)   clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6)   arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

(C)   The Administrative Law Judge Division may remand an appeal to the board to conduct further hearings.

(D)   For judicial review of a final decision of an administrative law judge in a case involving the commission, the petition by an aggrieved party must be filed with the circuit court and served on the opposing party not more than thirty days after the aggrieved party receives the final decision and order of the administrative law judge. Appeal in these matters is by right.

(E)   A lottery vendor who appeals the award of a procurement contract for the supply of a lottery game ticket system, share system, or an on-line or other mechanical or electronic system is liable for all costs of appeal and defense if the appeal is denied or the contract award is upheld. Cost of appeal and defense specifically includes, but is not limited to, administrative proceedings, court costs, bond, legal fees, and loss of income to the commission resulting from institution of the appeal if, upon the motion of the commission, the court finds the appeal was frivolous.

(F)   All actions and proceedings for review pursuant to this chapter, and all actions and proceedings to which the commission may be a party and in which a question arises pursuant to this chapter or pursuant to or concerning any order or decision of the commission must be given priority of hearing in all courts and reviewing entities over all other civil causes except election cases irrespective of position on the calendar.

Section 59-150-310.   (A)   The commission may expend, pursuant to the provisions of this chapter, monies received from any source, including income from the commission's operations, for effectuating


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its purposes, including the payment of the initial expenses of organization, administration, and operation of the commission and the lottery.

(B)   The commission must be self-sustaining and self-funded. Monies in the state general fund may not be used or obligated to pay the expenses of the commission or prizes of the lottery, and a claim for the payment of an expense of the lottery or prizes of the lottery may not be made against monies other than monies credited to the commission operating account.

(C)   The commission may purchase, lease, or lease-purchase goods or services necessary for effectuating the purposes of this chapter. The commission may make procurements which integrate functions such as lottery game design, lottery ticket distribution to a lottery retailer, supply of goods and services, and advertising. In all procurement decisions, the commission shall act to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objectives of raising net proceeds for the benefit of educational programs and purposes.

Section 59-150-320.   To ensure the financial integrity of the lottery, the commission, through its board, shall:

(1)   submit quarterly and annual reports to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the Comptroller General, the State Treasurer, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee disclosing the total lottery revenues, prize disbursements, operating expenses, and administrative expenses of the commission during the reporting period. The annual report additionally must describe the organizational structure of the commission, summarize the functions performed by each organizational division within the commission, and contain a detailed budget for the next fiscal year. The quarterly reports must be submitted within fifteen days of the end of the quarter, and the annual report must be submitted by October fifteenth;

(2)   adopt a system of internal audits;

(3)   maintain weekly or more frequently records of lottery transactions including the distribution of lottery game tickets or shares to a lottery retailer, revenues received, claims for prizes, prizes paid, prizes forfeited, and other financial transactions of the commission;

(4)   authorize the State Auditor to contract with a certified public accountant or firm for an independently audited financial statement prepared in accordance with generally accepted accounting principles,


Printed Page 3038 . . . . . Thursday, May 3, 2001

to be submitted to the Comptroller General's office each year no later than October fifteenth. The certified public accountant or firm shall not have a financial interest in a lottery vendor with whom the commission is under contract. The certified public accountant or firm shall evaluate the internal auditing controls in effect during the audit period. The cost of this annual financial audit is an operating expense of the commission. The State Auditor may at any time conduct an audit of any phase of the operations of the commission at the expense of the State and shall receive a copy of the annual independent financial audit. A copy of an interim audit performed by the certified public accountant or firm or the State Auditor must be transmitted after the close of the commission's fiscal year to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the State Treasurer, the Comptroller General, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee;

(5)   submit, for informational purposes only, to the Office of State Budget of the Budget and Control Board and the State Auditor by June thirtieth of each year a copy of the annual operating budget for the commission for the next fiscal year. This annual operating budget must be approved by the South Carolina Lottery Commission Board;

(6)   submit, for informational purposes only, to the Office of State Budget on November tenth of each year a proposed operating budget for the commission for the upcoming fiscal year;

(7)   adopt the same fiscal year as that used by state government; and

(8)   authorize the Legislative Audit Council to contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not have a financial interesting a lottery vendor with whom the commission is under contract The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation.

Section 59-150-330.   (A)   All claimant agencies of this State and persons on whose behalf the State and its claimant agencies act, in conjunction with the commission, shall cooperate in identifying debtors who owe money to the State and who qualify for prizes pursuant to this chapter from the commission; and the sum of any debt owed to the State or to persons on whose behalf the State and its claimant agencies


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act must be set off against a prize awarded pursuant to this chapter. This section must be liberally construed to effectuate these purposes.

(B)   As used in this section:

(1)   'Claimant agency' means any state or local agency, department, board, bureau, commission, or authority to which an individual owes a debt or which acts on behalf of an individual to collect a debt.

(2)   'Debt' means a liquidated sum due and owing a claimant agency, which sum has accrued through contract, subrogation, tort, or operation of law regardless of whether there is an outstanding judgment for the sum, or a sum which is due and owing a person and is enforceable by the State or any of its agencies or departments.

(3)   'Debtor' means an individual owing money to or having a delinquent account with a claimant agency, which obligation has not been adjudicated as satisfied by court order, set aside by court order, or discharged in bankruptcy.

(4)   'Prize' means the proceeds of a lottery prize awarded pursuant to this chapter.

(C)   The collection remedy authorized by this section is in addition to and not in substitution for any other remedy available by law.

(D)(1)   A claimant agency may submit to the commission a list of the names of all persons owing debts in excess of one hundred dollars to the claimant agency or to persons on whose behalf the claimant agency acts. The full amount of the debt is collectible from lottery winnings without regard to limitations on the amounts that may be collectible in increments through garnishment or other proceedings. The list constitutes a valid lien upon and claim of lien against the lottery winnings of a debtor named in the list. The list must contain the names of the debtors, their Social Security numbers if available, and other information which would assist the commission in identifying the debtors named in the list.

(2)   The commission shall withhold winnings subject to the lien created by this section and send notice to the winner by certified mail, return receipt requested, of such action and the reason why the winnings were withheld. If the winner appears and claims winnings in person, the commission shall notify the winner at that time, by hand delivery, of the action. If the debtor does not protest, in writing, the withholding of the funds within thirty days of notice, the commission shall pay the funds over to the claimant agency. If the debtor protests the withholding of funds, in writing, within thirty days of the notice,


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the commission shall file an action in interpleader in the circuit court of the county in which the debtor resides, pay the disputed sum into the court, and give notice to the claimant agency and debtor of the initiation of the action.

(3)   The liens created by this section rank among themselves as follows:

(a)   taxes due the State;

(b)   delinquent child support;

(c)   delinquent student loans; and

(d)   all other judgments and liens in order of the date entered or perfected.

(4)   The commission is not required to deduct claimed debts from prizes paid out by a lottery retailer or entities other than the commission.

(5)   A list of debtors and debts must be provided, pursuant to this section, periodically as the commission determines by rules and regulations, and the commission is not obligated to retain the lists or deduct debts appearing on the lists beyond the period determined by the rules and regulations.

(6)   The commission may prescribe forms, propose rules, and promulgate regulations necessary to carry out the provisions of this section.

(7)   The commission and a claimant agency do not incur civil or criminal liability for good faith adherence to the provisions of this section.

(8)   The claimant agency shall pay the commission for all costs incurred by the commission in setting off debts in the manner provided in this section. The commission may retain this fee as part of administrative expenses.

(E)(1)   Notwithstanding Section 59-150-240 or other confidentiality law, the commission may provide to a claimant agency all information necessary to accomplish and effectuate the intent of this section.

(2)   The information obtained by a claimant agency from the commission pursuant to this section must retain its confidentiality and may be used only by a claimant agency in the pursuit of its debt collection duties and practices. An employee or former employee of a claimant agency who unlawfully discloses this information for another purpose, except as otherwise specifically authorized by law, is subject to penalties as provided by law.


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(F)   The provisions of this section apply to prizes of six hundred dollars or more.

Section 59-150-340.   The net proceeds received from the state lottery for education as provided by law must be deposited by the State Treasurer in a fund separate and distinct from the state general fund entitled the 'Education Lottery Account'. All interest or income earned by the fund must be retained in the account and used for its stated purposes. However, all revenue received by the Education Lottery Account in any fiscal year together with earnings on it for that year must be disbursed as required by Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. It is the intent of the General Assembly in creating this Education Lottery Account that its funds be managed so as to establish and fund these programs permanently. Upon receipt of monies transferred to the Education Lottery Account held by the State Treasurer, these monies must be appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the programs and for the purposes stipulated in Section 59-150-350. The Comptroller General shall record these revenues received on a cash basis, and disbursements for the purposes provided also must be on a cash basis; however, unexpended funds at the end of a fiscal year after disbursement to the programs authorized to receive the funds as provided in Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years may be carried forward to future years and expended for the same purposes.

Section 59-150-350.   (A)   All lottery proceeds are the property of the commission, to be held in a separate and distinct account, apart from the State Treasury. Annual administrative expenses may not exceed fifteen percent of gross lottery revenues for the year, including lottery retailer commissions and incentives. The General Assembly shall consider, in the allocation of funds from the Education Lottery Account, the allocation of monies in the amount the General Assembly determines for the Commission on Higher Education and for the Administrative Law Judge Division, both to help defray their expenses incurred in the performance of their duties pursuant to this chapter; except that the amount of funding for the Commission on Higher Education and the Administrative Law Judge Division must be allocated by the General Assembly in its annual general appropriations


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bill or any bill appropriating monies for previous or current fiscal years. As nearly as practical, an amount no less than forty-five percent of the amount of money from the actual sale of lottery tickets or shares must be made available as prize money, except that this item does not create a lien, an entitlement, a cause of action, or other private right, and rights of holders of tickets or shares must be determined by the commission in setting the terms of its lottery or lotteries.

(B)   Before the sixteenth day of each month, the commission shall deposit to the State Treasurer, for credit to the Education Lottery Account for the preceding month, the amount of all net proceeds from the preceding month. The State Comptroller General shall account separately for net proceeds by establishing and maintaining a restricted account known as the Education Lottery Account. Upon their deposit with the State, monies representing a deposit of net proceeds become the unencumbered property of the State of South Carolina and the commission may not agree or undertake otherwise. The monies may be invested by the State Treasurer pursuant to state investment practices. All earnings attributable to the investments are also the unencumbered property of the State and accrue to the credit of the Education Lottery Account.

(C)   At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds. Appropriations from the Education Lottery Account must be allocated only for educational purposes and programs by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated to full funding of the LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as provided in Sections 59-149-10(E) and 59-149-50(D) and (E), and funding with all the remaining revenues for: elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and


Printed Page 3043 . . . . . Thursday, May 3, 2001

universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences, and Youth Education Scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations bill, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child. These programs may include, but are not limited to, language and literacy programs that help the child understand and tell stories, recognize pictures and words, learn the alphabet, and understand that writing is communication; math concepts that teach the child to count and sort objects into groups, recognize shapes, and make comparisons of size, shape, length, and weight; science concepts that teach the child to explore the natural environment, observe seasonal changes, communicate observations, and use tools to measure; art concepts that help the child express ideas and thoughts in creative ways, paint, draw, and sculpt, listen to music and sing songs, and recognize colors; and physical development activities that help the child move with balance and coordination, participate in indoor and outdoor physical activity, and use writing tools, puzzles, scissors, blocks, clay, and computers. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.

(D)   Appropriations by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years for educational purposes and programs from the account not committed during the fiscal year must be credited to the Education Lottery Account.

(E)(1)   A program or project started specifically from lottery proceeds may not be continued from the general fund, but the programs must be adjusted or discontinued according to available lottery


Printed Page 3044 . . . . . Thursday, May 3, 2001

proceeds, unless the General Assembly by general law establishes eligibility requirements and later appropriates specific funds within the general appropriations act. The provisions of this subsection do not prohibit the providing of supplemental funding to programs or projects in existence on the effective date of this chapter from lottery proceeds; provided, that funding for these existing programs or projects from the state general fund, the Education Improvement Act, or other nonlottery sources may not be reduced below that provided on the effective date of this chapter.

(2)   A surplus in the Education Lottery Account may not be reduced by the General Assembly to correct any nonlottery deficiencies in sums available for general appropriations and vice versa, and a surplus in the Education Lottery Account may not be included in a surplus calculated for setting aside any nonlottery reserve, specifically, without limitation, the General Reserve Fund or the Capital Reserve Fund."
SECTION   3.   Section 59-149-10 of the 1976 Code is amended by adding at the end to read:

"(E)(1)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as defined in this chapter is increased to the cost of tuition for thirty credit hours a year or its equivalent plus a three hundred dollar a year book allowance. Tuition for this purpose means the amount charged for registering for credit hours of instruction and shall not include other fees, charges, or costs of textbooks except for the referenced three hundred dollar book allowance.

(2)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year independent institution must continue to be the cost of attendance up to a maximum of three thousand dollars a year, and the annual amount for eligible resident students attending a two-year independent institution must increase to the cost of attendance up to a maximum of no more than the cost of tuition at a two-year regional public institution for thirty credit hours a year or its equivalent.

(3)   Beginning with the school year 2002-2003, the requirement that high school completion be accomplished on or after May 1995, for eligibility for the LIFE Scholarship is waived."
SECTION   4.   Section 59-149-50 of the 1976 Code is amended by adding subsections (D) and (E) to read:


Printed Page 3045 . . . . . Thursday, May 3, 2001

"(D)   Beginning with school year 2002-2003, an entering freshman to be eligible for a LIFE Scholarship in addition to the other requirements of this chapter shall meet two of the following three criteria:

(1)   have the grade point average required by this section;

(2)   have the Scholastic Aptitude Test (SAT) or equivalent ACT score required by this section;

(3)   be in the top thirty percent of his high school graduating class.

For home school students and students whose high school graduating class is less than fifty students, the Commission on Higher Education may define alternative criteria for students to meet the requirement of item (3).

After receipt of a LIFE Scholarship by an entering freshman beginning with school year 2002-2003, a student shall meet the criteria established in this chapter to retain or regain the scholarship.

(E)   Notwithstanding the provisions of this section and the other requirements of this chapter, beginning with school year 2002-2003, students attending a technical college of this State taking not less than eighteen credit hours of instruction a year but less than thirty credit hours a year who are otherwise eligible for a LIFE scholarship shall receive a LIFE scholarship equal to one-half the amount that eligible students receive at the technical college who take at least thirty credit hours of instruction a year."
SECTION   5.   The 1976 Code is amended by adding:

"Section 2-15-63.   (A)   Beginning in December 2004 and every three years after that, the Legislative Audit Council shall conduct a management performance audit of the South Carolina Lottery Commission. The cost of this audit is an operating expense of the commission.

(B)   Nothing in this section limits, abridges, or otherwise affects the provisions of Section 2-15-60.

(C)   The Legislative Audit Council may contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not have a financial interest in a lottery vendor with whom the commission is under contract. The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation."


Printed Page 3046 . . . . . Thursday, May 3, 2001

SECTION   6.   Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item to read:

"( )   a lottery ticket sold pursuant to Chapter 150 of Title 59;"
SECTION   7.   Section 59-63-210 of the 1976 Code is amended to read:

"Section 59-63-210.   (A)   Any district board of trustees may authorize or order the expulsion, suspension, or transfer of any pupil for a the commission of any crime, gross immorality, gross misbehavior, persistent disobedience, or for violation of written rules and promulgated regulations established by the district board, county board, or the State Board of Education, or when the presence of the pupil is detrimental to the best interest of the school. Every Each expelled pupil shall have has the right to petition for readmission for the succeeding school year. Expulsion or suspension shall must be construed to prohibit a pupil from entering the school, or school grounds, except for a prearranged conference with an administrator, attending any day or night school functions, or riding a school bus. The provisions of this section shall do not preclude enrollment and attendance in any adult or night school.

(B)   A district board of trustees shall not authorize or order the expulsion, suspension, or transfer of any pupil for a violation of Section 59-150-250(B)."
SECTION   8.   Except for Section 59-150-350(C), (D), and (E), provisions of this chapter relating to guidelines for the appropriation of lottery proceeds must not be amended in a general appropriations act, but only in a separate piece of legislation solely for that purpose and by a majority vote of those present and voting in both houses of the General Assembly.
SECTION   9.   The General Assembly shall review and evaluate, on a regular basis but at least biannually, the operation of the South Carolina Education Lottery and the success and efficiency with which the South Carolina Lottery Commission has undertaken that responsibility. The General Assembly, after each review and evaluation, may determine to:

(1)   transfer the whole or any part of the functions of the commission to the jurisdiction and control of any other agency;

(2)   consolidate, coordinate, or combine the functions of the commission with any other agency;

(3)   redirect any mission of the commission;

(4)   abolish any mission of the commission in whole or any part; or

(5)   abolish all or any part of the functions of the commission.


Printed Page 3047 . . . . . Thursday, May 3, 2001

SECTION   10.   Criminal penalties contained in Chapter 150, Title 59 apply only to offenses committed on or after the effective date of this act.
SECTION   11.   The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release, or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision so expressly provides. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION   12.   If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding does not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION   13.   This act takes effect upon approval by the Governor. /
Amend title to conform.

Rep. HARRELL explained the amendment.

Rep. J. E. SMITH spoke against the amendment.

Rep. KNOTTS moved to adjourn debate on the amendment.

Rep. JENNINGS demanded the yeas and nays which were taken, resulting as follows:

Yeas 94; Nays 0


Printed Page 3048 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allen                  Allison                Bales
Barfield               Barrett                Bingham
Bowers                 Breeland               Brown, G.
Brown, J.              Brown, R.              Campsen
Carnell                Cato                   Chellis
Clyburn                Coates                 Cobb-Hunter
Coleman                Cooper                 Cotty
Dantzler               Davenport              Delleney
Easterday              Emory                  Fleming
Freeman                Frye                   Gilham
Gourdine               Govan                  Hamilton
Harrell                Haskins                Hayes
Hines, J.              Hines, M.              Hinson
Hosey                  Huggins                Jennings
Keegan                 Kelley                 Kirsh
Knotts                 Koon                   Leach
Limehouse              Lloyd                  Loftis
Lourie                 Lucas                  Mack
Martin                 McCraw                 McGee
McLeod                 Miller                 Neal, J.M.
Owens                  Parks                  Perry
Quinn                  Rhoad                  Rice
Riser                  Rivers                 Robinson
Rodgers                Rutherford             Sandifer
Scarborough            Sheheen                Simrill
Sinclair               Smith, D.C.            Smith, F.N.
Smith, G.M.            Smith, J.E.            Smith, J.R.
Stille                 Talley                 Taylor
Tripp                  Vaughn                 Webb
Weeks                  Whatley                White
Wilder                 Wilkins                Young, A.
Young, J.

Total--94

Those who voted in the negative are:

Total--0

So, the motion to adjourn debate was agreed to.


Printed Page 3049 . . . . . Thursday, May 3, 2001

Reps. HARRELL, KEEGAN and KELLEY proposed the following Amendment No. 14 (Doc Name COUNCIL\BBM\AMEND\ 10289MM01), which was adopted:
Amend the bill, as and if amended, by deleting SECTION 12 in its entirety and inserting:
/ SECTION 12.   If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding does not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. HARRELL explained the amendment.

Rep. J. E. SMITH spoke against the amendment.
Rep. HARRELL spoke in favor of the amendment.
Rep. JENNINGS spoke against the amendment.

The question then recurred to the adoption of the amendment.

Rep. JENNINGS demanded the yeas and nays which were taken, resulting as follows:

Yeas 105; Nays 0

Those who voted in the affirmative are:

Allen                  Allison                Altman
Bales                  Barfield               Barrett
Battle                 Bingham                Bowers
Breeland               Brown, G.              Brown, R.
Campsen                Carnell                Cato
Chellis                Clyburn                Coleman
Cooper                 Cotty                  Dantzler
Davenport              Delleney               Easterday
Edge                   Emory                  Fleming
Freeman                Frye                   Gilham

Printed Page 3050 . . . . . Thursday, May 3, 2001

Gourdine               Govan                  Hamilton
Harrell                Harrison               Harvin
Haskins                Hayes                  Hines, J.
Hines, M.              Hinson                 Hosey
Howard                 Huggins                Jennings
Keegan                 Kelley                 Kirsh
Klauber                Knotts                 Koon
Leach                  Lee                    Limehouse
Littlejohn             Lloyd                  Loftis
Lourie                 Lucas                  Mack
Martin                 McGee                  McLeod
Miller                 Neal, J.M.             Owens
Parks                  Perry                  Phillips
Quinn                  Rhoad                  Rice
Riser                  Rivers                 Robinson
Rodgers                Sandifer               Scarborough
Scott                  Sheheen                Simrill
Sinclair               Smith, G.M.            Smith, J.E.
Smith, J.R.            Smith, W.D.            Stille
Stuart                 Talley                 Taylor
Thompson               Townsend               Tripp
Trotter                Vaughn                 Walker
Webb                   Weeks                  Whatley
Whipper                White                  Wilder
Wilkins                Young, A.              Young, J.

Total--105

Those who voted in the negative are:

Total--0

So, the amendment was adopted.

SPEAKER PRO TEMPORE IN CHAIR

Rep. HARRELL proposed the following Amendment No. 18 (Doc Name COUNCIL\BBM\AMEND\10320HTC01), which was tabled:
Amend the bill, as and if amended, by deleting SECTION 12 in its entirety and inserting:


Printed Page 3051 . . . . . Thursday, May 3, 2001

/ SECTION 12.   If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding does not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. HARRELL moved to table the amendment, which was agreed to.

Rep. JENNINGS moved that the House do now adjourn.

Rep. A. YOUNG demanded the yeas and nays which were taken, resulting as follows:

Yeas 24; Nays 79

Those who voted in the affirmative are:

Allen                  Askins                 Bales
Battle                 Breeland               Brown, G.
Brown, R.              Emory                  Gourdine
Harvin                 Hayes                  Hines, M.
Hosey                  Jennings               Littlejohn
Mack                   McLeod                 Neal, J.H.
Quinn                  Rhoad                  Sheheen
Smith, J.E.            Snow                   Weeks

Total--24

Those who voted in the negative are:

Allison                Altman                 Barfield
Barrett                Bingham                Bowers
Brown, J.              Campsen                Carnell
Cato                   Chellis                Clyburn
Coates                 Cobb-Hunter            Coleman
Cooper                 Cotty                  Dantzler

Printed Page 3052 . . . . . Thursday, May 3, 2001

Davenport              Delleney               Easterday
Edge                   Fleming                Freeman
Frye                   Gilham                 Govan
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Kirsh
Klauber                Knotts                 Koon
Law                    Leach                  Lee
Limehouse              Loftis                 Lourie
Lucas                  Martin                 McGee
Miller                 Owens                  Perry
Phillips               Rice                   Riser
Rivers                 Rodgers                Sandifer
Scarborough            Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Thompson
Townsend               Trotter                Vaughn
Walker                 Webb                   Whatley
White                  Wilder                 Young, A.
Young, J.

Total--79

So, the House refused to adjourn.

Rep. HARRELL proposed the following Amendment No. 19 (Doc Name COUNCIL\BBM\AMEND\10319HTC01), which was adopted:
Amend the bill, as and if amended, Section 59-150-20(7), SECTION 2, by deleting the item and inserting:
/ (7)   'Lottery', 'lotteries', 'lottery game', or 'lottery games' means a game of chance approved by the General Assembly and operated pursuant to this chapter including, but not limited to, instant tickets, on-line lottery games, and drawing numbers, but excluding keno, pari-mutuel betting, and casino gambling as defined in this section. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50. The access and use of an electronic or a mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and his employees only in order to facilitate retail sales of lottery


Printed Page 3053 . . . . . Thursday, May 3, 2001

tickets, and such a machine must not dispense anything other than lottery tickets.

As used in this item, 'casino gambling' means a location or business for the purpose of conducting unlawful gambling activities, but excluding the sale and purchase of lottery game tickets or shares; and 'pari-mutuel betting' means a method or system of wagering on actual races including races involving horses or dogs at tracks and the distribution of winnings by pools. /
Amend further, Section 59-150-60(D), by deleting the subsection and inserting:

/(D)   The commission is not authorized to use any machine specifically prohibited by Sections 12-21-2710, 16-19-40 and 16-19-50. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. HARRELL explained the amendment.
The amendment was then adopted.

Rep. HARRELL proposed the following Amendment No. 20 (Doc Name COUNCIL\BBM\AMEND\10318HTC01), which was adopted:
Amend the bill, as and if amended, Section 59-150-30(B), by deleting the second and third sentence which reads: /The cost of this audit, up to one hundred thousand dollars, is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the management performance audit./ and inserting:
/ The cost of this audit is an operating expense of the commission. /
Amend further, Section 59-150-230(I), by deleting the subsection and inserting:
/ (I)   Unclaimed prize money must be deposited in the Education Lottery Account each year. A portion, in an amount to be determined by the General Assembly, of the unclaimed prize money in the Education Lottery Account, must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the South Carolina Department of Alcohol and Other Drug Abuse Services for the treatment of compulsive gambling disorder and educational programs related to that disorder, including a gambling hotline. The Director of the DAODAS shall report to the board on the programs


Printed Page 3054 . . . . . Thursday, May 3, 2001

implemented with these funds, and provide a copy of the report to the General Assembly. /
Amend further, Section 59-150-350(A), by deleting the subsection and inserting:
/ (A)   All lottery proceeds are the property of the commission, to be held in a separate and distinct account, apart from the State Treasury. Annual administrative expenses may not exceed fifteen percent of gross lottery revenues for the year, including lottery retailer commissions and incentives. The General Assembly shall consider, in the allocation of funds from the Education Lottery Account, the allocation of monies in the amount the General Assembly determines for the Commission on Higher Education and for the Administrative Law Judge Division, both to help defray their expenses incurred in the performance of their duties pursuant to this chapter; except that the amount of funding for the Commission on Higher Education and the Administrative Law Judge Division must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. As nearly as practical, an amount no less than forty-five percent of the amount of money from the actual sale of lottery tickets or shares must be made available as prize money, except that this item does not create a lien, an entitlement, a cause of action, or other private right, and rights of holders of tickets or shares must be determined by the commission in setting the terms of its lottery or lotteries. /
Amend further, Section 2-15-63(A), SECTION 5, by deleting the second and third sentence which reads: /The cost of this audit, up to one hundred thousand dollars, is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the management performance audit./ and inserting:
/ The cost of this audit is an operating expense of the commission. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. HARRELL explained the amendment.
The amendment was then adopted.

Rep. HARRELL proposed the following Amendment No. 21 (Doc Name COUNCIL\BBM\AMEND\10317HTC01), which was adopted:
Amend the bill, as and if amended, by striking SECTION 13 and inserting:


Printed Page 3055 . . . . . Thursday, May 3, 2001

/SECTION   13.   This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. HARRELL explained the amendment.
The amendment was then adopted.

Rep. HARRELL proposed the following Amendment No. 22 (Doc Name COUNCIL\BBM\AMEND\10321HTC01), which was adopted:
Amend the bill, as and if amended, Section 59-150-60(A), SECTION 2, page [3307-10], line 10, by inserting / not more than / before /one-half/.
Amend further, Section 59-150-150(A), SECTION 2, page [3307-21], by deleting line 11 and inserting:
/ amount of not more than seven percent of gross sales and not more than a one percent incentive /
Renumber sections to conform.
Amend totals and title to conform.

Rep. HARRELL explained the amendment.
The amendment was then adopted.

Reps. CARNELL, BARRETT, D.C. SMITH, RODGERS, COLEMAN, WILDER, MILLER, HAYES, J. H. NEAL, J. M. NEAL, EMORY, JENNINGS, ASKINS, KLAUBER, BOWERS, BREELAND, HARVIN, PARKS, G. BROWN, BALES, SNOW, MCCRAW, PHILLIPS, OTT, COBB-HUNTER, CLYBURN, MCLEOD, BATTLE, HOSEY, KENNEDY, M. HINES, RHOAD, GILHAM and LLOYD proposed the following Amendment No. 27 (Doc Name COUNCIL\DKA\AMEND\4398MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-350(C), SECTION 2, by deleting the subsection and inserting:
/ (C)   At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds. Appropriations from the Education Lottery Account must be allocated


Printed Page 3056 . . . . . Thursday, May 3, 2001

only for educational purposes and programs by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated to full funding of the LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as provided in Sections 59-149-10(E) and 59-149-50(D), up to one percent of net proceeds to the South Carolina State Library for public library state aid, to be distributed to county public libraries on a per capita basis and to be used for educational technology delivery, upgrade, and maintenance, and funding with all the remaining revenues for: elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences, and Youth Education Scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations bill, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child. These programs may include, but are not limited to, language and literacy programs that help the child understand and tell stories, recognize pictures and words, learn the alphabet, and understand that writing is communication; math concepts that teach the child to count and sort objects into groups, recognize shapes, and make comparisons of size, shape, length, and weight; science concepts that teach the child to explore the natural environment, observe seasonal changes, communicate observations, and use tools to measure; art concepts that help the child express ideas and thoughts in creative ways, paint, draw, and sculpt, listen to music and sing songs, and recognize colors; and physical development activities that help the

Printed Page 3057 . . . . . Thursday, May 3, 2001

child move with balance and coordination, participate in indoor and outdoor physical activity, and use writing tools, puzzles, scissors, blocks, clay, and computers. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery. /
Amend title to conform.

Rep. CARNELL explained the amendment.

Rep. JENNINGS spoke in favor of the amendment.
Rep. HARRELL spoke against the amendment.

Rep. HARRELL moved to table the amendment.

Rep. MILLER demanded the yeas and nays which were taken, resulting as follows:

Yeas 57; Nays 54

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Bingham                Brown, G.              Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Dantzler
Davenport              Delleney               Easterday
Edge                   Fleming                Frye
Hamilton               Harrell                Harrison
Hinson                 Huggins                Keegan
Kelley                 Kirsh                  Knotts
Koon                   Law                    Leach
Limehouse              Littlejohn             Loftis
Martin                 McGee                  Owens
Quinn                  Rice                   Riser
Sandifer               Scarborough            Sharpe
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Talley                 Townsend               Tripp

Printed Page 3058 . . . . . Thursday, May 3, 2001

Trotter                Vaughn                 White
Wilkins                Young, A.              Young, J.

Total--57

Those who voted in the negative are:

Askins                 Bales                  Barrett
Battle                 Bowers                 Breeland
Brown, J.              Brown, R.              Carnell
Clyburn                Cobb-Hunter            Coleman
Emory                  Freeman                Gilham
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Lloyd                  Lourie                 Lucas
McCraw                 McLeod                 Miller
Moody-Lawrence         Neal, J.H.             Neal, J.M.
Ott                    Parks                  Perry
Phillips               Rhoad                  Rivers
Robinson               Rodgers                Rutherford
Scott                  Sheheen                Smith, J.E.
Snow                   Stille                 Stuart
Thompson               Walker                 Webb
Weeks                  Whatley                Wilder

Total--54

So, the amendment was tabled.

SPEAKER IN CHAIR

Rep. COBB-HUNTER proposed the following Amendment No. 31 (Doc Name COUNCIL\BBM\AMEND\10304MM01), which was rejected:
Amend the bill, as and if amended, Section 59-150-20, SECTION 2, by deleting (4) in its entirety and inserting:

/ (4)   'Educational purposes and programs' means nonrecurring new or supplemental educational expenses and scholarships including, but not limited to, merit based scholarships and need-based grants funding; delivery, upgrade, and maintenance of technology to public schools grades K-12; purchase of public school buses for grades K-12;


Printed Page 3059 . . . . . Thursday, May 3, 2001

and delivery and upgrade of public education programs to grades K-12. Scholarships or grants, as defined in this subitem, may be provided only to citizens of this State to enable them to attend only public institutions of higher learning, as defined in Section 59-103-5, and state technical schools and independent institutions of higher learning in this State, as defined in Section 59-113-50. /
Amend further, Section 59-150-320(1), SECTION 2, by deleting item (1) and inserting:

/ (1)   submit quarterly and annual reports to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the Comptroller General, the State Treasurer, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee disclosing the total lottery revenues, prize disbursements, operating expenses, and administrative expenses of the commission during the reporting period. The annual report additionally must describe the organizational structure of the commission, summarize the functions performed by each organizational division within the commission, and contain a detailed budget for the next fiscal year. The quarterly reports must be submitted within fifteen days of the end of the quarter, and the annual report must be submitted by October fifteenth. Both the quarterly and annual reports must break down lottery revenues and prize disbursements by zip code; / .
Amend further, by deleting Section 59-150-340, SECTION 2, in its entirety and inserting:
/ Section 59-150-340.   The net proceeds received from the state lottery for education as provided by law must be deposited by the State Treasurer in a fund separate and distinct from the state general fund entitled the 'Education Lottery Account'. All interest or income earned by the fund must be retained in the account and used for its stated purposes. However, all revenue received by the Education Lottery Account in any fiscal year together with earnings on it for that year must be disbursed as required by Section 59-150-350. It is the intent of the General Assembly in creating this Education Lottery Account that its funds be managed so as to establish and fund these programs permanently. Upon receipt of monies transferred to the Education Lottery Account by the State Treasurer, these monies must be appropriated to the programs and for the purposes stipulated in Section 59-150-350, in the order and according to the pro rata share of proceeds as designated. The Comptroller General must record these revenues received on a cash basis, and disbursements for the purposes


Printed Page 3060 . . . . . Thursday, May 3, 2001

provided also must be on a cash basis; however, unexpended funds at the end of a fiscal year after disbursement to the programs authorized to receive the funds as provided in Section 59-150-350 may be carried forward to future years and expended for the same purposes. /
Amend further, by deleting subsection (C) of Section 59-150-350, SECTION 2, in its entirety and inserting:
/   (C)At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds. Appropriations by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years from the Education Lottery Account must be allocated for educational purposes and programs only. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated so that up to fifty million dollars or fifty percent of the net proceeds, whichever is greater, is used for funding an increase in the base student costs for elementary and secondary public schools, with funds distributed to a school district according to the wealth-sensitive formula prescribed by the Education Finance Act of 1977, Chapter 20, Title 59; and the remaining fifty percent of net proceeds or the funds remaining, if any, after up to fifty million dollars of net proceeds, are distributed to and used by the Department of Education as follows: thirty percent of the remainder must be allocated for the purchase of public school buses, supplemental to any amounts appropriated for that purpose in the general appropriations act, by supplemental appropriations, or by a statewide bond bill; thirty percent of the remainder must be allocated equally between funding needs-based grants as defined in Chapter 142, Title 59, and tuition grants, as defined in Chapter 113, Title 59, with student eligibility to be determined in both cases, as appropriate, by "need" as defined by Title IV, Student Aid Programs for determining eligibility for federal financial aid for students; and forty percent of the remainder must be allocated for the delivery, upgrade, and maintenance of technology in educational facilities of public elementary and secondary schools. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal

Printed Page 3061 . . . . . Thursday, May 3, 2001

year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery. /
Amend title to conform.

Rep. COBB-HUNTER explained the amendment.

Rep. HARRELL moved to table the amendment.

Rep. COBB-HUNTER demanded the yeas and nays which were taken, resulting as follows:

Yeas 51; Nays 63

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Barrett                Bingham                Campsen
Chellis                Coates                 Cotty
Dantzler               Easterday              Edge
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Klauber
Koon                   Law                    Leach
Limehouse              Loftis                 Lucas
Martin                 McGee                  Owens
Perry                  Rice                   Riser
Sandifer               Scarborough            Sharpe
Smith, D.C.            Smith, G.M.            Smith, J.R.
Talley                 Taylor                 Tripp
Trotter                Vaughn                 Webb
Wilkins                Young, A.              Young, J.

Total--51

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, G.              Brown, J.              Brown, R.
Carnell                Cato                   Clyburn
Cobb-Hunter            Coleman                Cooper

Printed Page 3062 . . . . . Thursday, May 3, 2001

Davenport              Delleney               Emory
Freeman                Gourdine               Govan
Harvin                 Hayes                  Hines, J.
Hines, M.              Hosey                  Howard
Kennedy                Kirsh                  Knotts
Lee                    Littlejohn             Lloyd
Lourie                 Mack                   McLeod
Miller                 Moody-Lawrence         Neal, J.H.
Neal, J.M.             Ott                    Parks
Phillips               Rhoad                  Rivers
Robinson               Rutherford             Scott
Sheheen                Simrill                Smith, F.N.
Smith, J.E.            Snow                   Stille
Stuart                 Thompson               Townsend
Walker                 Weeks                  Whatley
Whipper                White                  Wilder

Total--63

So, the House refused to table the amendment.

Rep. HARRELL spoke against the amendment.

The question then recurred to the adoption of the amendment.

Rep. COBB-HUNTER demanded the yeas and nays which were taken, resulting as follows:

Yeas 53; Nays 64

Those who voted in the affirmative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, G.              Brown, J.              Brown, R.
Carnell                Clyburn                Cobb-Hunter
Coleman                Davenport              Emory
Freeman                Gourdine               Govan
Harvin                 Hayes                  Hines, J.
Hines, M.              Hosey                  Howard
Jennings               Kennedy                Kirsh
Lee                    Lloyd                  Lourie
Mack                   McLeod                 Miller

Printed Page 3063 . . . . . Thursday, May 3, 2001

Moody-Lawrence         Neal, J.H.             Neal, J.M.
Ott                    Parks                  Phillips
Rhoad                  Rivers                 Rutherford
Scott                  Sheheen                Smith, F.N.
Smith, J.E.            Snow                   Vaughn
Weeks                  Whatley                Whipper
White                  Wilder

Total--53

Those who voted in the negative are:

Allison                Altman                 Barfield
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cotty                  Dantzler               Delleney
Easterday              Edge                   Fleming
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Hinson                 Huggins                Keegan
Kelley                 Klauber                Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McGee                  Merrill
Owens                  Perry                  Quinn
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Stille                 Stuart                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Walker
Webb                   Wilkins                Young, A.
Young, J.

Total--64

So, the amendment was rejected.

RECORD FOR VOTING

With regard to Amendment No. 31 on the lottery proposal, Senate Bill S. 496, being considered today, we the undersigned members


Printed Page 3064 . . . . . Thursday, May 3, 2001

voted against adoption of this amendment because it contains language that if adopted would make this an "appropriations" bill.

While each of us supports and favors one or more of the provisions and such contained in this amendment, passage of this amendment would subject same to "line-item" veto authority of the Governor. Such would then make it possible that one or more of the major provisions we support and deem critical to a responsible and successful lottery bill then could be removed by line-item veto with no realistic chance of getting same back into the final act unless same had two thirds of the support of the House.

Rep. Harry Cato       Rep. Converse Chellis

Rep. Jay Lucas       Rep. Wallace Scarborough

Rep. Shirley Hinson     Rep. Jim Merrill

Rep. Scott Talley       Rep. David Owens

Rep. James Law       Rep. Bill Cotty

Rep. Dwight Loftis     Rep. Annette Young

Rep. Bob Leach       Rep. Mark Kelley

Rep. Rick Quinn       Rep. Alfred Robinson

Rep. Bill Sandifer       Rep. Jim Harrison

Reps. DELLENEY, LUCAS and SIMRILL proposed the following Amendment No. 32 (Doc Name NBD\AMEND\11661MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-40(D), by deleting the subsection and inserting:
/ (D)   The member shall serve at the pleasure of the official who appoints him. A vacancy that occurs on the board must be filled by appointment by the Governor, the President Pro Tempore of the Senate, or the Speaker of the House of Representatives, as appropriate, for the remainder of the unexpired term. /
Amend further, Section 59-150-40(L), by deleting the subsection and inserting:
/ (L)   A member is appointed to the board for a term, but serves at the pleasure of the official who appointed him. /
Amend title to conform.

Rep. DELLENEY moved to table the amendment.

Rep. MCLEOD demanded the yeas and nays which were taken, resulting as follows:

Yeas 91; Nays 1


Printed Page 3065 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allen                  Allison                Bales
Barfield               Barrett                Battle
Bingham                Bowers                 Breeland
Brown, G.              Cato                   Clyburn
Coates                 Coleman                Cooper
Dantzler               Davenport              Delleney
Easterday              Edge                   Fleming
Freeman                Frye                   Gilham
Gourdine               Govan                  Hamilton
Harrell                Harrison               Harvin
Hines, J.              Hines, M.              Hosey
Huggins                Jennings               Keegan
Kelley                 Kirsh                  Klauber
Koon                   Law                    Limehouse
Littlejohn             Lloyd                  Lourie
Lucas                  Martin                 McGee
McLeod                 Merrill                Moody-Lawrence
Neal, J.H.             Ott                    Owens
Parks                  Perry                  Phillips
Quinn                  Rhoad                  Rice
Rivers                 Rodgers                Rutherford
Sandifer               Scarborough            Sheheen
Simrill                Sinclair               Smith, F.N.
Smith, G.M.            Smith, J.E.            Smith, J.R.
Smith, W.D.            Snow                   Stuart
Talley                 Taylor                 Thompson
Townsend               Tripp                  Trotter
Vaughn                 Walker                 Webb
Weeks                  Whatley                Whipper
White                  Wilkins                Young, A.
Young, J.

Total--91

Those who voted in the negative are:

Kennedy

Total--1

So, the amendment was tabled.


Printed Page 3066 . . . . . Thursday, May 3, 2001

Rep. LOURIE moved that the House recede until 2:00 p.m.

Rep. HARRELL demanded the yeas and nays which were taken, resulting as follows:

Yeas 30; Nays 74

Those who voted in the affirmative are:

Allen                  Askins                 Battle
Bowers                 Brown, R.              Coleman
Emory                  Gourdine               Govan
Hines, M.              Hosey                  Jennings
Lee                    Lloyd                  Lourie
Martin                 McLeod                 Miller
Neal, J.H.             Ott                    Parks
Robinson               Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Snow                   Webb                   Weeks

Total--30

Those who voted in the negative are:

Allison                Altman                 Bales
Barfield               Barrett                Bingham
Campsen                Carnell                Cato
Chellis                Coates                 Cooper
Cotty                  Dantzler               Davenport
Delleney               Easterday              Edge
Fleming                Freeman                Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Hinson
Huggins                Keegan                 Kirsh
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
McCraw                 McGee                  Merrill
Owens                  Perry                  Phillips
Quinn                  Rhoad                  Rice
Riser                  Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Smith, W.D.            Stuart

Printed Page 3067 . . . . . Thursday, May 3, 2001

Talley                 Taylor                 Thompson
Townsend               Tripp                  Trotter
Vaughn                 Walker                 Whatley
White                  Wilder                 Wilkins
Young, A.              Young, J.

Total--74

So, the House refused to recede.

Rep. JENNINGS proposed the following Amendment No. 35 (Doc Name COUNCIL\DKA\AMEND\4445MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-60(A)(17), SECTION 2, by deleting in the last sentence of the second paragraph / the commission official web site/ and by inserting:
/ taxicabs or at bus stops /
Amend title to conform.

Rep. JENNINGS explained the amendment.

LEAVE OF ABSENCE

The SPEAKER granted Rep. J. BROWN a temporary leave of absence.

Rep. HARRELL moved to table the amendment.

Rep. WEEKS demanded the yeas and nays which were taken, resulting as follows:

Yeas 59; Nays 46

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Barrett                Bingham                Campsen
Cato                   Chellis                Cooper
Cotty                  Delleney               Easterday
Edge                   Fleming                Frye
Gilham                 Govan                  Hamilton
Harrell                Haskins                Hinson
Huggins                Keegan                 Kelley
Klauber                Koon                   Law
Leach                  Limehouse              Littlejohn

Printed Page 3068 . . . . . Thursday, May 3, 2001

Loftis                 Lucas                  Martin
Merrill                Perry                  Quinn
Rice                   Riser                  Rodgers
Sandifer               Scarborough            Sharpe
Simrill                Smith, D.C.            Smith, J.R.
Smith, W.D.            Stille                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilkins                Young, J.

Total--59

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, G.              Carnell                Clyburn
Coates                 Coleman                Dantzler
Emory                  Hayes                  Hines, J.
Hines, M.              Hosey                  Howard
Jennings               Kennedy                Kirsh
Lee                    Lloyd                  Lourie
Mack                   McCraw                 McGee
McLeod                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Phillips               Rivers                 Robinson
Rutherford             Sheheen                Smith, F.N.
Snow                   Stuart                 Weeks
Whatley                Whipper                Wilder
Young, A.

Total--46

So, the amendment was tabled.

Rep. JENNINGS proposed the following Amendment No. 36 (Doc Name COUNCIL\DKA\AMEND\4444MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-210(C), SECTION 2, by deleting the first sentence and inserting:
/ Lottery game tickets or shares must not be sold to persons under twenty-one years of age. /


Printed Page 3069 . . . . . Thursday, May 3, 2001

Amend further, Section 59-150-250(A), (B), (C), and (D), by deleting / eighteen / in the subsections and inserting in all places: /twenty-one /.
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 37 (Doc Name COUNCIL\DKA\AMEND\4443MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-210(C), SECTION 2, by deleting the first sentence and inserting:
/ Lottery game tickets or shares must not be sold to persons under twenty-one years of age, but a person twenty-one years of age or older may purchase lawfully lottery game tickets or shares and make a gift to a person of any age. /
Amend further, Section 59-150-250(A), (B), (C), and (D), by deleting / eighteen / in the subsections and inserting in all places: /twenty-one /.
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 38 (Doc Name COUNCIL\DKA\AMEND\4442MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-210(C) and (D), SECTION 2, by striking the subsections and inserting:
/   (C)   Lottery game tickets or shares must not be sold to persons under twenty-one years of age.

(D)   A lottery ticket or share may not be sold on the date of any general elections; within three hundred feet of a church, school, or playground, as provided in Section 59-150-150(B)(2)(i); to a lottery game other than that defined in Section 59-150-20(7); to a lottery game with corporate sponsorship; on Sunday; or at a location that serves on-premise consumption of alcohol. /
Amend the bill further by striking Section 59-150-250(A) and (B) and inserting:
/   (A)   A person who knowingly sells a lottery game ticket or share to a person under twenty-one years of age or permits a person under twenty-one years of age to play a lottery game is guilty of a


Printed Page 3070 . . . . . Thursday, May 3, 2001

misdemeanor and, upon conviction, must be fined not less than one hundred dollars nor more than five hundred dollars or be imprisoned not less than thirty days nor more than sixty days, or both, in the discretion of the court. It is an affirmative defense to a charge of a violation of this section that the lottery retailer reasonably and in good faith relied upon representation of proof of age in making the sale.

(B)   A person under twenty-one years of age who knowingly purchases a lottery game ticket is guilty of a misdemeanor and, upon conviction, must perform twenty hours of community service or must be fined not less than one hundred dollars and not more than five hundred dollars. /
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 39 (Doc Name COUNCIL\DKA\AMEND\4441MM01), which was tabled:
Amend the bill, as and if amended, by striking Section 59-150-150(A) in its entirety and inserting:
/ Section 59-150-150.   (A)   The commission shall develop and maintain a statewide network of lottery retailers to serve the public convenience and promote the sale of tickets or shares and the playing of lottery games as defined in Section 59-150-20(7) while ensuring the integrity of the lottery operations, games, and activities. A lottery retailer's sales of lottery tickets or shares may not exceed fifty percent annually of its total business as measured by gross revenues. The Department of Revenue shall provide data concerning a lottery retailer's gross revenues to assist the commission in verifying compliance with this provision. The commission also shall provide a small retailer a chance to participate in the sales of lottery tickets or shares and provide for compensation to a lottery retailer in the form of commissions in an amount of seven percent of gross sales and a one percent incentive for cashing winning tickets for prizes less than six hundred dollars. The Department of Revenue shall issue a license to each person with whom the commission contracts as a lottery retailer for purposes of display. Each lottery retailer shall post and display conspicuously its license on the disclosure sign required by Section 59-150-60(A)(17). A license is not assignable or transferable and must be renewed annually with the Department of Revenue upon satisfactory payment of all fees and taxes./


Printed Page 3071 . . . . . Thursday, May 3, 2001

Amend the bill further by striking Section 59-150-270(B) in its entirety and inserting:
/   (B)   A person who is convicted of a violation of subsection (A) also must surrender his license immediately and is ineligible to be issued a license by the Department of Revenue. /
Renumber sections to conform.
Amend title to conform.

Rep. JENNINGS explained the amendment.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. STILLE proposed the following Amendment No. 67 (Doc Name COUNCIL\SWB\AMEND\5421DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50, by adding a new subparagraph appropriately numbered to read:
/ ( )   Students awarded scholarships who do not attain a B average must repay the lottery scholarship program one-half of the amount awarded for that previous semester. /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment, which was agreed to.

Rep. STILLE proposed the following Amendment No. 68 (Doc Name COUNCIL\SWB\AMEND\5422DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 4, Section 59-149-50, by adding a new subparagraph appropriately numbered to read:
/ ( )   Students awarded scholarships who do not attain a B average must repay the lottery scholarship program all of the amount awarded for that previous semester. /
Renumber sections to conform.
Amend title to conform.

Rep. STILLE moved to table the amendment, which was agreed to.

Reps. JENNINGS and SCOTT proposed the following Amendment No. 71 (Doc Name COUNCIL\GGS\AMEND\22058CM01), which was tabled:


Printed Page 3072 . . . . . Thursday, May 3, 2001

Amend the bill, as and if amended, by striking Section 59-150-60 and inserting:
/   Section 59-150-60.   (A)   The board has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter which are not in conflict with the Constitution of this State and which are generally exercised by boards engaged in entrepreneurial pursuits including, but not limited to, the powers to:

(1)   sue and be sued in contract and in tort and to complain and defend in all courts;

(2)   adopt and alter a seal and symbol;

(3)   adopt, amend, and repeal bylaws, promulgate regulations, and adopt policies and procedures for the regulation of its affairs and the conduct of its business; to elect and prescribe the duties of officers and employees of the board; and to perform other matters as the board may determine;

(4)   procure or to provide self-insurance;

(5)   hold copyrights, trademarks, and service marks and enforce its rights with respect to them;

(6)   organize, initiate, supervise, and administer the operation of the lottery as provided by this chapter and regulations promulgated and policies and procedures adopted pursuant to this chapter;

(7)   enter into written agreements with one or more other states or sovereigns for the operation, participation in marketing, and promotion of a joint lottery or joint lottery games;

(8)   conduct necessary or appropriate market research;

(9)   acquire or lease real property and make improvements on it and acquire by lease or by purchase personal property including, but not limited to, computers; mechanical, electronic, and on-line equipment and terminals; and intangible property including, but not limited to, computer programs, systems, and software. To achieve cost savings and efficiency, the board shall use, to the maximum extent possible, the telecommunications network service of the Budget and Control Board's Office of Information Resources pursuant to Sections 1-11-430 and 11-35-1580;

(10)   enter into contracts to incur debt in its own name and enter into financing agreements with the State, agencies or instrumentalities of the State, or with a commercial bank or credit provider; however, no obligation is assumed by the State;

(11)   administer oaths, take depositions, issue subpoenas, and compel the attendance of witnesses and the production of books,


Printed Page 3073 . . . . . Thursday, May 3, 2001

papers, documents, and other evidence relative to any investigation or proceeding conducted by the board;

(12)   appoint, select, or hire officers, agents, and employees, including professional and administrative staff and personnel and hearing officers to conduct hearings required by this chapter, and to fix their compensation and pay their expenses. Notwithstanding another provision of law, the board has exclusive authority to contract for legal services. All employees of the board are employees-at-will and are eligible for participation in the South Carolina Retirement System, the State Health Insurance Group plans, and are encompassed by the South Carolina Tort Claims Act;

(13)   make pension payments to the South Carolina Retirement System and pay contributions to the Office of Insurance Services for dental and health plans on behalf of personnel or employees employed by the board who qualify in the same manner as other state employees in the executive branch of government;

(14)   select and contract with vendors and retailers;

(15)   enter into contracts or agreements with state or local law enforcement agencies for the performance of law enforcement, background investigations, and security checks;

(16)   enter into contracts of any and all types on such terms and conditions as the board may determine;

(17)   establish and maintain banking relationships including, but not limited to, establishment of checking and savings accounts and lines of credit;

(18)   advertise and promote the lottery and lottery games in a dignified manner befitting the State. The amount spent on advertising may not exceed 7.5 million dollars during the first two fiscal years of operation of the lottery. For the third and subsequent fiscal years of operation of the lottery, the amount spent on advertising may not exceed two percent of the previous year's gross sales. The board must establish an advertising policy to ensure that advertising content and practices do not target with the intent to exploit specific ethnic groups or economic classes of people, and that the content of the advertising is accurate and not misleading. Lottery advertising must not contain the name or picture of an elected official or State Seal or its likeness. The board must review, at least quarterly, all past lottery advertising and proposedd concepts for major media campaigns to ensure that the advertising did not and does not target with the intent to exploit specific ethnic groups or economic classes of people, and that the content is accurate and not misleading. The commission must promote


Printed Page 3074 . . . . . Thursday, May 3, 2001

fair and responsible play, including disclosure of the odds of winning, and must ensure that any advertising used does not exhort the public to bet by misrepresenting, directly or indirectly, a person's chance of winning a prize. The commission may use interviews, pictures, or statements from people who have won lottery prizes to show that prizes are won and awarded. If the board finds that advertising conflicts with these policies, the board must cause the cessation of that advertising. In addition, wherever lottery game tickets are sold, the commission must provide information regarding resources for persons with gambling problems. Wherever lottery game tickets are sold, a lottery retailer must post a conspicuous sign in a prominent location, inside the retailer's premises and adjacent to the point of sale, clearly warning of the dangers and risks of gambling and the odds of winning and the odds of losing;

(19)   act as a retailer, conduct promotions which involve the dispensing of lottery game tickets or shares, and establish and operate a sales facility to sell lottery game tickets or shares and related merchandise; and

(20)   promulgate regulations and adopt and amend policies and procedures necessary to carry out and implement its powers and duties, organize and operate the board, regulate the conduct of lottery games in general, and other matters necessary or desirable for the efficient and effective operation of the lottery or the convenience of the public.

(B)   The powers enumerated in subsection (A) of this section are cumulative of and in addition to those powers enumerated elsewhere in this chapter, and do not limit or restrict other powers of the board.

(C)   The board is prohibited from distributing monies other than as prescribed by this chapter.

(D)   The board is not authorized to use any machine specifically prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   The board is subject to the limitations upon, and exemptions from, liability and damages provided in the South Carolina Tort Claims Act. /
Amend title to conform.

Rep. JENNINGS explained the amendment.

Rep. RICE moved to table the amendment.


Printed Page 3075 . . . . . Thursday, May 3, 2001

Rep. JENNINGS demanded the yeas and nays which were taken, resulting as follows:

Yeas 71; Nays 45

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Dantzler
Davenport              Delleney               Easterday
Edge                   Fleming                Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Hinson
Huggins                Keegan                 Kelley
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McCraw                 McGee
Merrill                Owens                  Perry
Quinn                  Rice                   Riser
Robinson               Rodgers                Sandifer
Scarborough            Sharpe                 Sheheen
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Stuart                 Talley                 Taylor
Thompson               Townsend               Tripp
Trotter                Vaughn                 Walker
Webb                   White                  Wilkins
Young, A.              Young, J.

Total--71

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, R.              Carnell                Clyburn
Cobb-Hunter            Coleman                Emory
Freeman                Gourdine               Govan
Hayes                  Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Kennedy                Kirsh                  Lee

Printed Page 3076 . . . . . Thursday, May 3, 2001

Lloyd                  Lourie                 Mack
McLeod                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Parks                  Phillips               Rhoad
Rivers                 Rutherford             Scott
Smith, F.N.            Smith, J.E.            Weeks
Whatley                Whipper                Wilder

Total--45

So, the amendment was tabled.

Reps. JENNINGS and SCOTT proposed the following Amendment No. 72 (Doc Name COUNCIL\DKA\AMEND\4395MM01):
Amend the bill, as and if amended, Section 59-150-230(C), SECTION 2, by deleting the subsection and inserting:
/ (C)   The commission shall promulgate regulations and adopt policies and procedures to establish a system of verifying the validity of lottery games tickets or shares claimed to win prizes and to effect payment of prizes.

(1)   A prize, a portion of a prize, or a right of a person to a prize awarded is not assignable except as provided in this section. A prize or a portion of a prize remaining unpaid at the death of a prize winner must be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the commission with a notarized letter of direction from the settlor and no written notice of revocation has been received by the commission before the settlor's death. Following a settlor's death and before payment to a trustee, the commission shall obtain from the trustee a written agreement to indemnify and hold the commission harmless with respect to claims that may be asserted against the commission arising from payment to or through the trust. Notwithstanding any other provisions of this section, a person, pursuant to an appropriate judicial order, may be paid the prize to which a winner is entitled.

(2)   A prize must not be paid if it:

(a)   arises from claimed lottery game tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;


Printed Page 3077 . . . . . Thursday, May 3, 2001

(b)   lacks captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or

(c)   fails to comply with additional specific regulations and public or confidential validation and security tests of the commission appropriate to the particular lottery game involved.

(3)   A particular prize in a lottery game must not be paid more than once, and if more than one person is entitled to a particular prize, the sole remedy of those persons is the award to each of them of an equal share in the prize.

(4)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days, or for a multi-state lottery game within one hundred eighty days, after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter. /
Amend title to conform.

Rep. JENNINGS explained the amendment.

Rep. JENNINGS moved to adjourn debate on the amendment, which was agreed to.

Reps. OTT, BALES and KNOTTS proposed the following Amendment No. 73 (Doc Name COUNCIL\SWB\AMEND\ 5462DJC01):
Amend the bill, as and if amended, by adding a new SECTION appropriately numbered to read:
/SECTION   ___.   The 1976 Code is amended to read:

"Section 59-149-58.   Notwithstanding any other provision of law, students attending a technical college of this State who are at least twenty-five years of age and who have a 3.0 average on a 4.0 scale after the first semester meet the academic requirements for receiving a life scholarship under this chapter at that technical college." /
Renumber sections to conform.
Amend totals and title to conform.

Rep. OTT explained the amendment.


Printed Page 3078 . . . . . Thursday, May 3, 2001

Rep. OTT moved to adjourn debate on the amendment, which was agreed to.

Reps. OTT, BALES and KNOTTS proposed the following Amendment No. 74 (Doc Name COUNCIL\SWB\AMEND\ 5463DJC01), which was tabled:
Amend the bill, as and if amended, by adding a new SECTION to be appropriately numbered to read:
/ SECTION   ___.   The 1976 Code is amended by adding:

"Section 59-149-57.   Notwithstanding any other provision of law, students attending a technical college of this State who have graduated from high school with a minimum of a 2.0 cumulative grade average on a 4.0 scale and are ranked in the top fifty percent of their class meet the academic requirements to receive a LIFE Scholarship to attend a technical college of this State." /
Amend further, Section 59-149-50 as contained in SECTION 4, by deleting subsection (D) and inserting:
/   "(D)   Except has provided in Section 59-149-57, beginning with school year 2002-2003, an entering freshman to be eligible for a LIFE Scholarship in addition to the other requirements of this chapter shall meet two of the following three criteria:

(1)   have the grade point average required by this section;

(2)   have the Scholastic Aptitude Test (SAT) or equivalent ACT score required by this section;

(3)   be in the top thirty percent of his high school graduating class.

For home school students and students whose high school graduating class is less than fifty students, the Commission on Higher Education may define alternative criteria for students to meet the requirement of item (3).

After receipt of a LIFE Scholarship by an entering freshman beginning with school year 2002-2003, a student shall meet the criteria established in this chapter to retain or regain the scholarship." /
Renumber sections to conform.
Amend title to conform.

Rep. OTT explained the amendment.

Rep. COATES moved to table the amendment.


Printed Page 3079 . . . . . Thursday, May 3, 2001

Rep. KENNEDY demanded the yeas and nays which were taken, resulting as follows:

Yeas 60; Nays 49

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Dantzler
Easterday              Edge                   Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Hinson
Huggins                Keegan                 Kelley
Kirsh                  Klauber                Koon
Law                    Leach                  Limehouse
Loftis                 Martin                 McGee
Merrill                Owens                  Perry
Quinn                  Rice                   Riser
Rodgers                Sandifer               Scarborough
Sharpe                 Simrill                Smith, D.C.
Smith, G.M.            Smith, J.R.            Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilkins                Young, A.              Young, J.

Total--60

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Carnell                Clyburn                Cobb-Hunter
Coleman                Davenport              Delleney
Emory                  Freeman                Gourdine
Govan                  Hayes                  Hines, J.
Hines, M.              Hosey                  Jennings
Kennedy                Lee                    Lloyd
Lourie                 Lucas                  Mack
McCraw                 McLeod                 Miller
Moody-Lawrence         Neal, J.H.             Neal, J.M.
Ott                    Phillips               Rhoad

Printed Page 3080 . . . . . Thursday, May 3, 2001

Rivers                 Robinson               Scott
Sheheen                Sinclair               Smith, F.N.
Smith, J.E.            Snow                   Stuart
Weeks                  Whatley                Whipper
Wilder

Total--49

So, the amendment was tabled.

Rep. HARRELL proposed the following Amendment No. 13 (Doc Name COUNCIL\DKA\AMEND\4436MM01), which was tabled:
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION   1.   The General Assembly finds that:

(1)   net proceeds of lottery games conducted pursuant to this chapter must be used to support improvements and enhancements for educational purposes and programs as provided by the General Assembly and that the net proceeds must be used to supplement, not supplant, existing resources for educational purposes and programs;

(2)   lottery games are an entrepreneurial enterprise and that the State shall create an instrumentality of the State and public body, corporate and politic, known as the South Carolina Lottery Commission, with the comprehensive and extensive powers as generally exercised by commissions engaged in entrepreneurial pursuits;

(3)   lottery games must be operated and managed in a manner which ensures that the lottery is operated with integrity and dignity and free of political influence, maximizes the use of revenues, and provides continuing entertainment to the public;

(4)   the South Carolina Lottery Commission must be accountable to the General Assembly and to the public through a system of audits and reports; and

(5)   this act is not a bill appropriating money out of the State Treasury as contemplated by Section 21 of Article IV of the Constitution of this State and, therefore, is not subject to a line item or section objection or veto by the Governor. It is the intent of the General Assembly that this act merely specify the educational purposes and programs, and parameters, for funding by the General Assembly through the annual general appropriations bill or any bill appropriating monies for previous or current fiscal years.


Printed Page 3081 . . . . . Thursday, May 3, 2001

SECTION   2.   Title 59 of the 1976 Code is amended by adding:

"CHAPTER 150
South Carolina Education Lottery Act

Section 59-150-10.   This chapter may be cited as the 'South Carolina Education Lottery Act'.

Section 59-150-20.   As used in this chapter:

(1)   'Administrative expenses' means operating expenses, excluding amounts set aside for prizes, regardless of whether the prizes are claimed, and excluding amounts held as a fidelity fund pursuant to Section 59-150-170.

(2)   'Board' means the Board of Commissioners of the South Carolina Lottery Commission.

(3)   'Commission' means the South Carolina Lottery Commission.

(4)   'Educational purposes and programs' means educational expenses and scholarships as defined in Section 59-150-350(C).

(5)   'Executive director' means the Executive Director of the South Carolina Lottery Commission or his designee.

(6)   'Immediate family' means a person who is:

(a)   a spouse;

(b)   a child residing in the same household; or

(c)   claimed as a dependent for income tax purposes.

(7)   ''Lottery', 'lotteries', 'lottery game', or 'lottery games' means a game of chance approved by the General Assembly and operated pursuant to this chapter including, but not limited to, instant tickets, on-line lottery games, and drawing numbers, but excluding keno, pari-mutuel betting, and casino gambling as defined in this section. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50. The access and use of an electronic or a mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and his employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense anything other than lottery tickets.

As used in this item, 'casino gambling' means a location or business for the purpose of conducting unlawful gambling activities, but excluding the sale and purchase of lottery game tickets or shares; and 'pari-mutuel betting' means a method or system of wagering on actual races including races involving horses or dogs at tracks and the distribution of winnings by pools.


Printed Page 3082 . . . . . Thursday, May 3, 2001

(8)   'Lottery retailer' means a person who sells lottery game tickets or shares on behalf of the South Carolina Lottery Commission pursuant to a contract.

(9)   'Lottery vendor' means a person who provides or proposed to provide goods or services to the South Carolina Lottery Commission pursuant to a procurement contract, but does not include an employee of the commission, a lottery retailer, or a state agency or instrumentality of the State. The term includes a corporation whose shares are traded publicly and which is the parent company of the contracting party in a procurement contract.

(10)   'Major procurement contract' means a gaming product or service costing in excess of seventy-five thousand dollars including, but not limited to, major advertising contracts, annuity contracts, prize payment agreements, consulting services, equipment, tickets, and other products and services unique to the South Carolina lottery but not including materials, supplies, equipment, and services common to the ordinary operations of a business.

(11)   'Member' or 'members' means a Commissioner or Commissioners of the Board of the South Carolina Lottery Commission.

(12)   'Minority business' means a business which meets the definition of a socially and economically disadvantaged small business as described in Article 21, Chapter 35, Title 11, specifically a small business concern which:

(a)   is at least fifty-one percent owned by one or more citizens of the United States who are determined to be socially and economically disadvantaged;

(b)   in the case of a concern which is a corporation, at least fifty-one percent of all classes of voting stock of such corporation is owned by an individual determined to be socially and economically disadvantaged; or

(c)   in the case of a concern which is a partnership, at least fifty-one percent of the partnership interest is owned by an individual or individuals determined to be socially and economically disadvantaged or whose management and daily business operations are controlled by individuals determined to be socially and economically disadvantaged. Those individuals must be involved in the daily management and operations of the business concerned.

'Small business' as used in this item means a business which meets the definition of a small business for purposes of the Small Business Administration, an agency of the United States.


Printed Page 3083 . . . . . Thursday, May 3, 2001

(13)   'Net proceeds' means all revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery games, less operating expenses and prizes.

(14)   'Operating expenses' means all costs of doing business including, but not limited to, prizes, commissions, and other compensation paid to a lottery retailer, advertising and marketing costs, rental fees, personnel costs, capital costs, depreciation of property and equipment, funds for compulsive gambling education and treatment, amounts held in or paid from a fidelity fund pursuant to Section 59-150-170, and other operating costs, including funds to the Commission on Higher Education and the Administrative Law Judge Division toward their expenses incurred in performance of their duties pursuant to this chapter.

(15)   'Person' means an individual, corporation, partnership, unincorporated association, or other legal entity.

(16)   'Prize' means an award, gift, or anything of value regardless of whether there are conditions or restrictions attached to its receipt.

(17)   'Proceeds' means all lottery revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery or received by the commission.

(18)   'Share' means intangible evidence of participation in a lottery game.

(19)   'Ticket' means tangible evidence issued by the South Carolina Lottery Commission to provide participation in a lottery game.

Section 59-150-30.   (A)   There is created a commission to be known as the South Carolina Lottery Commission, which is deemed to be a public commission and an instrumentality of the State. The commission and its employees are subject to the South Carolina Consolidated Procurement Code, South Carolina Administrative Procedures Act, South Carolina Ethics Reform Act, and South Carolina Freedom of Information Act. Venue for the commission is in Richland County.

(B)   Beginning in December 2004 and every three years after that, or by legislative request, the Legislative Audit Council shall conduct a management performance audit of the commission. The cost of this audit is an operating expense of the commission.

Section 59-150-40.   (A)   The commission is governed by a board composed of nine members to be appointed as follows: three members must be appointed by the Governor, three members must be appointed


Printed Page 3084 . . . . . Thursday, May 3, 2001

by the President Pro Tempore of the Senate, and three members must be appointed by the Speaker of the House of Representatives.

(B)   A member must:

(1)   be a resident of the State of South Carolina;

(2)   not have been convicted of a felony offense or bookmaking or other form of unlawful gambling. A background investigation must be conducted on each board nominee. The commission shall pay for the cost of the investigation and may contract with the State Law Enforcement Division (SLED) or appropriate federal agency for the performance of the investigation;

(3)   meet the qualifications for electors as provided in Section 7-5-120;

(4)   not have been an elected public official, as provided in Section 24, Article III of the Constitution of this State and Section 2-1-100, for at least two years before appointment; and

(5)   have been screened by a panel pursuant to procedures it establishes and found by the panel to meet the statutory qualifications and considerations for appointment to the board. The Governor, Speaker of the House of Representatives, and the President Pro Tempore of the Senate each shall submit the names of his potential board appointees to the panel. If the panel finds the potential appointee meets or does not meet the statutory qualifications, it shall notify the appointing authority who submitted the name. A potential appointee found not statutorily qualified by the panel may not be appointed to the board. The screening panel is composed of ten members: five selected by the President Pro Tempore of the Senate and five selected by the Speaker of the House of Representatives. The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each select three members of their respective bodies and two members from the public to serve on the screening panel. The members of the panel serve four-year terms. The investigation and consideration by the panel of a potential appointee is limited to the statutory qualifications established pursuant to this chapter. A panel member may be removed upon unanimous vote of the appointing authorities, or for cause by his appointing authority for malfeasance, incompetency, conflict of interest, misconduct, persistent neglect of duty in office, or incapacity.

(C)   In making appointments to the board, the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives, as appropriate, shall consider legal, financial, accounting, and marketing experience and race, gender, and other


Printed Page 3085 . . . . . Thursday, May 3, 2001

demographics factors to ensure nondiscrimination, inclusion, and representation of all segments of the State to the greatest extent possible.

(D)   The members shall serve terms of three years, except that of the initial appointments the Governor shall appoint two members, each to serve a two-year term, and one member to serve a four-year term; the Speaker of the House of Representatives shall appoint three members, each to serve a two-year term, co-terminus with the Speaker; and the President Pro Tempore of the Senate shall appoint three members, each to serve an initial four-year term. A vacancy that occurs on the board must be filled by appointment by the Governor, the President Pro Tempore of the Senate, or the Speaker of the House of Representatives, as appropriate, for the remainder of the unexpired term.

(E)   A member shall not serve on the board if he is an officer or employee of the commission or if he has an immediate family member employed by the commission.

(F)   A member of the board may receive per diem, subsistence, and mileage at the rate provided by law for members of state boards, committees, and commissions.

(G)   The board shall elect from their membership officers of the board, including the chair.

(H)   The board may delegate to the executive director of the commission those powers and duties it considers proper.

(I)   A majority of members in office or at least five members, whichever is greater, constitutes a quorum for the transaction of business and for the exercise of a power or function of the commission.

(J)   Action may be taken and motions and resolutions adopted by the board at a board meeting by affirmative vote of a majority of present and voting board members. This subsection does not relieve the board from the requirements of the South Carolina Freedom of Information Act.

(K)   A vacancy in the membership of the board does not impair the right of the members to exercise all the powers and perform all the duties of the board.

(L)   A member is appointed to the board for a term and may be removed from the board before the expiration of his term only upon unanimous vote of the appointing authorities, or for cause by his appointing authority for malfeasance, incompetency, conflict of interest, misconduct, persistent neglect of duty in office, or incapacity.


Printed Page 3086 . . . . . Thursday, May 3, 2001

(M)   A member of the board shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

Section 59-150-50.   The board shall:

(1)   approve, disapprove, amend, or modify the budget recommended by the executive director for the operation of the commission;

(2)   approve, disapprove, amend, or modify the terms of procurements recommended by the executive director;

(3)   hear appeals of hearings required by this chapter;

(4)   promulgate regulations and adopt policies and procedures regulating the conduct of lottery games pursuant to the Administrative Procedures Act and as specified in Section 59-150-60(A)(19); and

(5)   perform other functions specified by this chapter.

Section 59-150-60.   (A)   The commission has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter which are not in conflict with the Constitution and laws of this State and which generally are exercised by commissions engaged in entrepreneurial pursuits on behalf of the State including, but not limited to, the powers to:

(1)   sue and be sued in contract and in tort and to complain and defend in all courts, subject to the South Carolina Tort Claims Act;

(2)   adopt and alter a corporate seal and symbol;

(3)   promulgate regulations and adopt policies and procedures for the regulation of its affairs and the conduct of its business; to elect and prescribe the duties of officers and employees of the commission; and to perform other matters as the commission may determine;

(4)   procure or to provide self-insurance;

(5)   hold copyrights, trademarks, and service marks and enforce its rights with respect to them;

(6)   organize, initiate, supervise, and administer the operation of the lottery as provided by this chapter and regulations promulgated and policies and procedures adopted pursuant to this chapter;

(7)   enter into written agreements with one or more other states for the operation, participation in marketing, and promotion of a joint lottery or joint lottery games;

(8)   conduct necessary or appropriate market research, which may include an analysis of the demographic characteristics of the


Printed Page 3087 . . . . . Thursday, May 3, 2001

players of the lottery game and an analysis of advertising, promotion, public relations, incentives, and other aspects of communication;

(9)   acquire or lease real property and make improvements on it and acquire by lease or by purchase personal property including, but not limited to, computers; mechanical, electronic, and on-line equipment and terminals; and intangible property including, but not limited to, computer programs, systems, and software. To achieve cost savings and efficiency, the commission shall use the telecommunications network service of the Budget and Control Board's Office of Information Resources pursuant to Sections 1-11-430 and 11-35-1580 provided that the commission certifies that the service is secure;

(10)   administer oaths, take depositions, issue subpoenas, and compel the attendance of witnesses and the production of books, papers, documents, and other evidence relative to any investigation or proceeding conducted by the commission;

(11)   appoint, select, or hire officers, agents, and employees, including professional and administrative staff, personnel, and hearing officers to conduct hearings required by this chapter, and to fix their compensation and pay their expenses. Notwithstanding another provision of law, the commission has exclusive authority to contract for legal services. All employees of the commission are employees-at-will and are eligible for participation in the South Carolina Retirement System and may elect optional retirement program coverage in the same manner as provided in Section 9-20-10(2)(a), the State Health Insurance Group plans, and are encompassed by the South Carolina Tort Claims Act;

(12)   make pension payments to the South Carolina Retirement System or other system approved by the State Retirement System and pay contributions to the Office of Insurance Services for dental and health plans on behalf of personnel or employees employed by the commission who qualify in the same manner as other state employees in the executive branch of government;

(13)   select and contract with a lottery vendor and a lottery retailer;

(14)   enter into contracts or agreements with state or other law enforcement agencies for the performance of law enforcement, background investigations, and security checks;

(15)   enter into contracts on such terms and conditions as the commission may determine, except that the commission shall not enter into contracts to incur debt in its own name or enter into financing


Printed Page 3088 . . . . . Thursday, May 3, 2001

agreements with the State, agencies, or instrumentalities of the State, or with a commercial bank or credit provider; however, necessary start-up monies may be borrowed from the Insurance Reserve Fund of the Budget and Control Board, subject to the loan repayment terms of the Budget and Control Board, for effectuating its purpose, including payment of the initial expenses of initiation, administration, and operation of the commission and the lottery, if and only if sufficient start-up monies are not appropriated from the general fund;

(16)   enter into contracts of any type on the terms and conditions the commission determines, except that it may not enter into a contract with an entity for the purpose of having that entity assume or otherwise undertake the organization and conduct of the lottery;

(17)   advertise and promote the lottery and lottery games in a dignified manner befitting the State, but only in compliance with the same state and federal standards of truth in advertising which govern private advertisers engaged in interstate commerce and including the restrictions described in this item. The board shall review, at least quarterly, all past lottery advertising and proposed concepts for major media campaigns to ensure that the advertising did not and does not target with the intent to exploit specific ethnic groups or economic classes of people, and that the content is accurate and not misleading. The commission shall promote fair and responsible play, including disclosure of the odds of winning, and shall ensure that any advertising used does not exhort the public to bet by misrepresenting, directly or indirectly, a person's chance of winning a prize. The commission may use interviews, pictures, or statements from people who have won lottery prizes to show that prizes are won and awarded. If the board finds that advertising conflicts with these policies, the board shall cause the cessation of that advertising;

advertising and promotion of the lottery and lottery games as defined in Section 59-150-20(7) is restricted to: expenditure of not more than one-half of one percent of gross lottery revenues; contracts of one year or less and awarded by the board after competitive bidding; information about how the game is played; identification of amounts or recipients, or both of them, of funding from the proceeds of ticket sales; explanation of the permitted uses of lottery proceeds; probability of winning; an entertainment context; encouragement of responsible play; information about recognizing and seeking treatment for compulsive gambling; sites and methods designed to reach the responsible adult player; and advertisements and promotions placed


Printed Page 3089 . . . . . Thursday, May 3, 2001

exclusively by the commission in newspapers or periodicals or on the commission official web site;

advertising and promotion of the lottery and lottery games must not include: inducements to play; targeting with the intent to exploit specific ethnic groups or economic classes of people; representations of the game as an investment or the answer to financial concerns; exaggeration of odds of winning; the name or image, or both, of an elected official, or the State Seal or its likeness; praise of a lottery player or denigration of a nonplayer; implication that the game is one of skill; suggestion that the lottery player is contributing money for the good of the State; any advertising outside of the lottery retailer's business premises; and advertising in connection with or at the site of a public school or institution of higher learning or sponsorship of an activity at a public school or institution of higher learning;

lottery advertising and promotion also: must include posting of warnings of the dangers and risks of gambling, and the odds of winning, on a three by two foot sign in a conspicuous location in all lottery retailer facilities; must otherwise encourage responsible decision making regarding lottery play by adults, discourage abusive use of the lottery product; and, other than as permitted in the provisions of this chapter for the commission and the lottery retailer, may not be undertaken by another entity or individual;

(18)   act as a lottery retailer, conduct promotions which involve the dispensing of lottery game tickets or shares, and establish and operate a sales facility to sell lottery game tickets or shares and related merchandise, except that the commission shall not establish, operate, or authorize a lottery sales facility at any state Welcome Center or state rest area; and

(19)   promulgate regulations and adopt and amend policies and procedures as necessary to carry out and implement its powers and duties, organize and operate the commission, regulate the conduct of lottery games as defined in Section 59-150-20(7), and other matters necessary or desirable for the efficient and effective operation of the lottery for the convenience of the public. The promulgation of the regulations and adoption of the policies and procedures are subject to the requirements of the Administrative Procedures Act.

(B)   The powers enumerated in subsection (A) are cumulative of and in addition to those powers enumerated elsewhere in this chapter, and do not limit or restrict other powers of the commission.

(C)   The commission is prohibited from distributing monies other than as prescribed by this chapter including, but not limited to, the


Printed Page 3090 . . . . . Thursday, May 3, 2001

prohibition of contributing to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); and the prohibition of making an independent expenditure to advance or defeat a measure related to the lottery.

(D)   The commission is not authorized to use any machine specifically prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   The commission is subject to the limitations upon, and exemptions from, liability and damages provided in the South Carolina Tort Claims Act.

(F)   The commission shall not issue, sell, or authorize the sale of lottery tickets or shares at a location licensed to provide deferred presentment services pursuant to Chapter 39 of Title 34.

(G)   The commission shall not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and the commission may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section 2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the commission.

(H)   The commission may not sell or give away tickets for promotional purposes.

Section 59-150-70.   In accordance with the Administrative Procedures Act, the board may promulgate regulations and adopt policies and procedures regulating the conduct of lottery games in general; except the commission may promulgate temporary regulations and adopt policies and procedures to implement the provisions of this chapter which must be consistent with this chapter, except as otherwise provided in this section. The commission shall have tickets available for purchase by the public no later than November 1, 2001, or as soon as practicable. These temporary regulations, polices, and procedures are not considered regulations as defined by the Administrative Procedures Act; however, these temporary regulations, policies, and procedures have the force and effect of law. The only lottery games that may be played pursuant to these temporary regulations, policies, and procedures are instant tickets, dollar tickets, and dollar joint- or multi-state lottery games. The commission shall submit regulations to the General Assembly for review in accordance with the Administrative Procedures Act at the January 15, 2002, legislative session. The temporary regulations authorized in this section are


Printed Page 3091 . . . . . Thursday, May 3, 2001

repealed on July 15, 2004, or on the effective date of regulations promulgated pursuant to the Administrative Procedures Act, whichever date occurs first. If regulations promulgated pursuant to the Administrative Procedures Act have not taken effect by July 15, 2004, the commission may promulgate the temporary regulations authorized by this section as emergency regulations pursuant to Section 1-23-130. For purposes of this section, the circumstances required for emergency regulations in Section 1-23-130(A) do not apply, but all other provisions of Section 1-23-130 are applicable. The regulations, policies, and procedures must specify, but are not limited to specifying, the:

(1)   type of lottery games as described in Section 59-150-20(7). The lottery games may include the selling of lottery game tickets or shares or the use of electronic or mechanical devices, except those electronic or mechanical devices prohibited by Section 59-150-20(7), and except that the game or activity in which the winner is selected must not be based upon the outcome of a football, basketball, baseball, or similar game or sports event;

(2)   sale price of lottery game tickets or shares and the manner of sale, except that all sales must be for cash only. Payment by checks, credit cards, charge cards, or other form of deferred payment and payment by debit card are prohibited;

(3)   number and amount of prizes;

(4)   method and location of selecting or validating winning lottery game tickets or shares;

(5)   manner and time of payment of prizes, which may include lump sum payments or installments over a period of years, except that the State is not liable for the nonpayment of a prize;

(6)   manner of payment of prizes by a lottery retailer to the holders of a winning lottery game ticket or share including, without limitation, provision for payment of prizes not exceeding six hundred dollars after deducting the price of the lottery game ticket or share and after performing validation procedures appropriate to the game and as specified by the board;

(7)   frequency of lottery games and drawings or selection of winning lottery game tickets or shares;

(8)   means of conducting drawings, except that an elected or appointed official, other than the members of the board or its designee, must not preside or appear at a drawing, and except that the drawing may be aired publicly only by means of a public service announcement


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and carried by any news outlet that makes public service time available for that purpose;

(9)   method to be used in selling lottery game tickets or shares, which may include the use of electronic or mechanical devices, but the devices must be placed on the premises of the lottery retailer in a location which is only accessible to the lottery retailer or his employees;

(10)   manner and amount of compensation to a lottery retailer within the limits of this chapter;

(11)   other matters necessary or desirable toward ensuring the efficient and effective operation of lottery games as defined in Section 59-150-20(7), the continued entertainment and convenience of the public, and the integrity of the lottery.

Section 59-150-80.   (A)   The board shall appoint and provide for the compensation of an executive director who must be an employee of the commission and who directs the day-to-day operations and management of the commission and is vested with powers and duties specified by the board and by law. The executive director serves at the pleasure of the board.

(B)   The board shall hire and provide for the compensation of an internal auditor and necessary staff who must be employees of the commission and who are vested with the powers and duties specified by the board and by law. The internal auditor shall report directly to the board.

Section 59-150-90.   (A)   The executive director of the commission shall direct and supervise all administrative and technical activities as provided for in this chapter, according to the terms and conditions as may be established by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years and with the regulations promulgated and policies and procedures adopted by the board. It is the duty of the executive director to facilitate the initiation and supervise and administer the operation of the lottery games as defined in Section 59-150-20(7); employ and direct necessary personnel; employ by contract and compensate necessary persons and firms, except that the contract may not be with an entity for the purpose of having that entity undertake the organization and conduct of the lottery; promote or provide for promotion of the lottery and functions related to the commission; prepare a budget for the approval of the board; require bond from a lottery retailer and a lottery vendor in amounts required by the board; report monthly to the State Auditor and the board a full and complete


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statement of lottery revenues and expenses for the preceding month; and perform other duties generally associated with an executive director of a commission of an entrepreneurial nature.

(B)   The executive director for good cause may suspend, revoke, or refuse to renew a contract entered into as provided by the provisions of this chapter or the regulations, policies, and procedures of the board.

(C)   The executive director or his designee may conduct hearings and administer oaths to persons for the purpose of assuring the security or integrity of lottery operations or to determine the qualifications of or compliance by a lottery vendor and a lottery retailer.

(D)   The executive director shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

Section 59-150-100.   (A)   The commission shall establish and maintain a personnel program for its employees and fix the compensation and terms of compensation of its employees.

(B)   An employee of the commission or an immediate family member of an employee of the commission, as defined in Section 59-150-20(6), may not have a financial interest in a lottery vendor doing business or proposing to do business with the commission and is otherwise subject to the South Carolina Ethics Reform Act.

(C)   An employee of the commission who has decision-making authority shall not participate in a decision involving a lottery retailer with whom the employee has an economic interest as defined in the South Carolina Ethics Reform Act.

(D)   Notwithstanding any other provision of law, an employee of the commission who leaves his employment may not represent a lottery vendor or lottery retailer before the commission for a period of two years following termination of employment with the commission.

(E)   A background investigation must be conducted on each applicant who has reached the final selection process before employment by the commission at the level of division director and above and at any level within any division of security and as otherwise required by the board. The commission shall pay for the actual cost of the investigations and may contract with SLED for the performance of the investigations. The results of a background investigation are not a record open to the public pursuant to the Freedom of Information Act.


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(F)   A person who has been convicted of a felony or bookmaking or other forms of illegal gambling or of a crime involving moral turpitude may not be employed by the commission.

(G)   The commission shall bond commission employees who have access to commission funds or lottery revenue in an amount provided by the board and may bond other employees as necessary.

Section 59-150-110.   (A)   The Governor shall appoint a Lottery Retailer Advisory Board to be composed of ten lottery retailers, representing the broadest possible spectrum of geographical, racial, gender, and business characteristics of a lottery retailer. The Governor also shall appoint the chairman of the advisory board. The function of the advisory board is to advise the lottery board on retail aspects of the lottery and to present the concerns of a lottery retailer throughout the State. The advisory board may establish a consumer representatives committee to help provide additional insight on other aspects of lottery retail sales.

(B)   Members appointed to the advisory board serve terms of two years, except that four of the initial lottery retailer appointees serve initial terms of one year and five serve initial terms of two years. The chairman of the advisory board serves co-terminus with the Governor.

(C)   The advisory board shall establish its own rules and internal operating procedures. Members of the advisory board serve without compensation or the per diem, subsistence, or mileage provided by law for members of state boards, committees, and commissions. The advisory board may report to the board of commissioners in writing at any time. The board of commissioners may invite the advisory board to make an oral presentation to the commissioners at regular meetings of the board.

Section 59-150-120.   The commission shall provide training programs and other educational activities to enable small and minority businesses to compete for contracts on an equal basis. The board shall monitor the results of small and minority business participation and shall report the results of small and minority business participation to the State Human Affairs Commission on at least an annual basis pursuant to Section 1-13-110.

Section 59-150-130.   (A)   In coordination with SLED, the commission shall investigate the financial responsibility, security, and integrity of a lottery vendor who is a finalist in submitting a bid, proposal, or offer as part of a procurement. To defray a portion of the expense of this investigation, each lottery vendor finalist shall submit a certified check for five thousand dollars to the commission. This sum


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must be placed in an escrow account from which SLED must be paid to conduct the investigation pursuant to this section. If five thousand dollars is not sufficient to complete the investigation, the commission shall require the lottery vendor finalist to remit additional funds. Any funds remaining in the escrow account after the investigation is complete must be returned to the lottery vendor finalist. At the time of submitting the bid, proposal, or offer to the commission, the commission shall require disclosure of the:

(1)   lottery vendor's name and address and, as applicable, the names and addresses of the following, if the lottery vendor is:

(a)   a corporation, the officers and directors and each stockholder in the corporation, except that in the case of owners of equity securities of a publicly-traded corporation, the names and addresses of only those known to the corporation to own beneficially five percent or more of the securities must be disclosed;

(b)   a trust, the trustee and all persons entitled to receive income or benefits from the trust;

(c)   an association, the members, officers, and directors; and

(d)   a partnership or joint venture, all of the general partners, limited partners, or joint venturers;

(2)   states and jurisdictions in which the lottery vendor does business and the nature of the business for each such state or jurisdiction;

(3)   states and jurisdictions in which the lottery vendor has contracts to supply gaming goods or services including, but not limited to, lottery goods and services, and the nature of the goods or services involved for each state or jurisdiction;

(4)   states and jurisdictions in which the lottery vendor has applied for, sought renewal of, received, been denied, or had revoked, or has issuance pending of, a lottery or gaming license of any kind or had fines or penalties assessed to his license, contract, or operation and the disposition of each in each state or jurisdiction. If a lottery or gaming license or contract has been revoked or has not been renewed or a lottery or gaming license or application has been denied or is pending and has remained pending for more than six months, all of the facts and circumstances underlying the failure to receive a license must be disclosed;

(5)   details of a finding or any plea, conviction, or adjudication of guilt in a state or federal court of the lottery vendor for a felony or other criminal offense other than a traffic violation. A fingerprint exemplar may be required to satisfy this item;


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(6)   details of any bankruptcy, insolvency, reorganization, or corporate or individual purchase or takeover of another corporation, including bonded indebtedness, or pending litigation of the lottery vendor;

(7)   contributions made to the campaign of a candidate for the General Assembly or statewide constitutional office, to any political party, as defined in Section 8-13-1300(26), or to a committee, as defined in Section 8-13-1300(6), or independent expenditures made to advance or defeat a measure related to the lottery for the twelve-month period before the application and up to the date of disqualification of the applicant or the awarding of the contract, whichever occurs first; and

(8)   additional information the commission determines appropriate for the procurement involved.   If at least twenty percent of the cost of a lottery vendor's contract is subcontracted, the lottery vendor shall disclose all of the information required by this section for the subcontractor as if the subcontractor were itself a lottery vendor.

(B)   A lottery procurement contract must not be entered into with a lottery vendor who has not complied with the disclosure requirements described in subsection (A), and a contract with a noncomplying lottery vendor is voidable at the option of the commission. The commission may terminate a contract with a lottery vendor who does not comply with the requirements for periodically updating the disclosures during the time specified in the contract. The provisions of this section must be construed broadly and liberally to achieve the ends of full disclosure of all information necessary to allow for a full and complete evaluation by the commission of the competence, integrity, background, and character of a lottery vendor for procurements.

(C)   A procurement contract must not be entered into with a lottery vendor who has been found guilty of a felony related to the security or integrity of the lottery in this or any other jurisdiction.

(D)   A procurement contract must not be entered into with a lottery vendor if the lottery vendor has an ownership interest in an entity that supplied consultation services under contract to the commission regarding the request for proposals pertaining to those particular goods or services.

(E)   A lottery vendor or applicant for a major procurement contract may not pay, give, or otherwise make available an economic opportunity, gift, loan, gratuity, special discount, favor, hospitality, or service, excluding food and beverages having an aggregate value not exceeding twenty-five dollars in one day or two hundred dollars in a


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calendar year, or any other thing of value, to the executive director, a board member, or an employee of the commission or to a member of his immediate family residing in the same household. For purposes of this subsection all terms are used as defined in Section 8-13-100.

(F)   A lottery vendor who has entered into the competitive solicitation process for a procurement contract or has been awarded a procurement contract with the commission shall not contribute, for a period of twelve months before entering into the procurement process, except that during the first twelve months the period must be from the date of enactment, and during the term of the contract, to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

(G)   A former public official holding public office, a former public member holding public membership, or a former public employee having public employment on or after the effective date of this chapter may not serve a lottery vendor for a period of two years after terminating his public service or employment.

(H)   A lottery vendor may not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and a lottery vendor may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section 2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the lottery vendor.

(I)   A lottery vendor may not advertise or promote the lottery or its business relationship with the commission.

(J)   A lottery vendor that is a contractor with the State or any agency, commission, or department of the State shall disclose, upon written inquiry, the amount of any commission, referral fee, finder's fee, consulting fee, contingency fee, or other monies paid in connection with obtaining the contract and the name of the person to whom the monies were paid.

(K)   The prohibitions and restrictions described in item (A)(7) and subsections (F) and (H) specifically apply to a lottery vendor as defined in Section 59-150-20(9) and its employees, members of its board, and holders of an interest in it of more than ten percent, and their immediate family members, as defined in Section 59-150-20(6).

(L)   If a court of competent jurisdiction rules that item (A)(7) or subsection (F) or (H) are unconstitutional or otherwise unenforceable,


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then the commission is prohibited from entering into a contract with a lottery vendor if the fee or commission payable in connection with the contract is based on sales or profitability.

Section 59-150-140.   (A)   At the execution of the contract with the commission, a lottery vendor shall post a performance bond or letter of credit from a bank or credit provider acceptable to the commission in an amount determined by the commission for that particular bid or contract. Instead of the bond, a lottery vendor, to assure the faithful performance of its obligations, may deposit and maintain with the commission securities that are interest bearing or accruing and that are rated in one of the three highest classifications by an established nationally recognized investment rating service. Securities eligible pursuant to this section are limited to:

(1)   certificates of deposit issued by solvent banks or savings associations which are organized and existing under the laws of this State or under the laws of the United States and are approved by the commission;

(2)   United States bonds, notes, and bills for which the full faith and credit of the government of the United States is pledged for the payment of principal and interest; and

(3)   corporate bonds approved by the commission. The corporation that issued the bonds must not be an affiliate or subsidiary of the depositor. The securities must be held in trust and must have at all times a market value equal at least to the full amount estimated to be paid annually to the lottery vendor under contract.

(B)   Each lottery vendor must be qualified to do business in this State and shall file appropriate tax returns as provided by the laws of this State. All contracts pursuant to this section are governed by the laws of this State.

(C)   A contract may not be let with a lottery vendor in which a public official has an ownership interest unless the letting of the contract complies with Section 8-13-775.

(D)   Procurement contracts must be handled in accordance with the South Carolina Consolidated Procurement Code.

(E)   In all contracts entered into in connection with this chapter, the resident lottery vendor preference provided in Section 11-35-1524 must apply to procurements made by the commission, except that the following additional provisions apply:

(1)   the preference also must apply to the procurement of services, as defined in Section 11-35-310(29), and advertising;


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(2)   with respect to the procurement of services or advertising, the definition of the term 'resident lottery vendor' must be modified as provided in this item. Section 11-35-1524(B)(6)(c) does not apply to a lottery vendor providing services or advertising. Instead of Section 11-35-1524(B)(6)(c), the lottery vendor shall provide services or advertising which are representative of the general type of services or advertising on which the bid is submitted;

(3)   with respect to the procurement of services or advertising, instead of providing the certifications provided in Section 11-35-1524(C), the lottery vendor shall certify in writing in the bid:

(a)   that he is resident of the State;

(b)   the services or advertising is available; and

(c)   the cost of the services or advertising is not unreasonable.

Section 59-150-150.   (A)   The commission shall develop and maintain a statewide network of lottery retailers to serve the public convenience and promote the sale of tickets or shares and the playing of lottery games as defined in Section 59-150-20(7) while ensuring the integrity of the lottery operations, games, and activities. A lottery retailer's sales of lottery tickets or shares may not exceed sixty percent annually of its total business as measured by gross revenues. The Department of Revenue shall provide data concerning a lottery retailer's gross revenues to assist the commission in verifying compliance with this provision. The commission also shall provide a small retailer a chance to participate in the sales of lottery tickets or shares; provide for compensation to a lottery retailer in the form of commissions in an amount of not more than seven percent of gross sales and not more than a one percent incentive for cashing winning tickets for prizes less than six hundred dollars; and issue a license to each person with whom it contracts as a lottery retailer for purposes of display. Each lottery retailer shall post and display conspicuously its license on the disclosure sign required by Section 59-150-60(A)(17). A license is not assignable or transferable.

(B)   The board shall develop a list of objective criteria upon which the qualification of a lottery retailer must be based. Separate criteria must be developed to govern the selection of a lottery retailer of instant tickets and an on-line lottery retailer. In developing these criteria, the board shall consider factors such as the applicant's financial responsibility, integrity, and reputation, and the security of the applicant's place of business or activity, and accessibility to the public. The board shall not consider political affiliation or activities or


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monetary contributions to political organizations or candidates for public office. The criteria must include, but is not limited to, the following:

(1)   The applicant must be current in filing all applicable tax returns to the State of South Carolina and in payment of all taxes, interest, and penalties owed to the State of South Carolina, excluding items under formal appeal pursuant to applicable statutes. The Department of Revenue shall provide this information to the commission.

(2)   A person, partnership, unincorporated association, corporation, or other business entity must not be selected as a lottery retailer if he or it:

(a)   has been convicted of a criminal offense related to the security or integrity of the lottery in this or another jurisdiction;

(b)   has been convicted of unlawful gambling activity, false statements, false swearing, or perjury in this or another jurisdiction or convicted of a crime punishable by more than one year of imprisonment or a fine of more than one thousand dollars, or both, unless the person's civil rights have been restored and at least five years have elapsed from the date of the completion of the sentence without a subsequent conviction of a crime described in this subitem;

(c)   has been found to have violated the provisions of this chapter or a regulation, policy, or procedure of the commission, unless either ten years have passed since the violation or the board finds the violation both minor and unintentional in nature;

(d)   is a lottery vendor or an employee or agent of a lottery vendor doing business with the commission;

(e)   resides in the same household as an officer of the commission;

(f)   has made a statement of material fact to the commission knowing the statement is false;

(g)   has a business of selling lottery tickets or shares that accounts for more than sixty percent annually of its gross revenues, except that the commission may not sell or give away lottery tickets or shares as a lottery retailer, as provided in Section 59-150-210;

(h)   has not attained the age of twenty-one years, except that this age restriction applies only to the lottery retailer or lottery retailer applicant and not to a bona fide employee of the lottery retailer; and

(i)     has its place of business located within three hundred feet of a church, school, or playground situated within a municipality or within five hundred feet of a church, school, or playground situated


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outside of a municipality. These distances must be measured in a straight line, without regard to intervening structures or objects, from the nearest property line of the lot on which a building or structure is used as a lottery retailer to the nearest property line of the location of the church, school, or playground, which are defined as follows:

(i)     'church' means an establishment, other than a private dwelling, where religious services are usually conducted;

(ii)   'school' means an establishment, other than a private dwelling, where the usual processes of education are usually conducted; and

(iii)   'playground' means a place, other than grounds at a private dwelling, which is provided by the public or members of a community for recreation.

The restrictions in subitem (i) do not apply to the renewal of a license or to a new application for a location that is licensed at the time the new application is filed with the commission.

(3)   A person applying to become a lottery retailer must be charged a uniform application fee for each lottery outlet. A lottery retailer who participates in on-line lottery games must be charged a uniform application fee for each on-line outlet.

(4)   A lottery retailer contract executed pursuant to this chapter may be suspended, revoked, or terminated for good cause by the executive director or his designee if the lottery retailer is found to have violated a provision of this chapter or the regulations, policies, and procedures established by the board. Review of activities is subject to the Administrative Procedures Act.

(5)   Lottery retailer contracts may be renewable annually at the discretion of the commission, unless sooner canceled or terminated.

(6)   A lottery retailer or lottery retailer applicant shall not pay, give, or otherwise make available anything of value to a member of the board of directors of the commission in violation of provisions of the South Carolina Ethics Reform Act.

(7) A lottery retailer who enters into a contract with the commission shall file an initial certified report with the State Ethics Commission showing all contributions or donations made to a committee, as defined in Section 8-13-1300(6). The lottery retailer shall file additional certified reports within ten days following the end of each calendar quarter and for the duration of the contract with the commission.

Section 59-150-160.   (A)   A lottery retailer contract is not transferable or assignable. A lottery retailer shall not contract with a


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person for lottery goods or services except with the approval of the board.

(B)   Lottery game tickets and shares must be sold only by the lottery retailer named on the lottery retailer certificate.

(C)   A lottery retailer may not advertise or promote the lottery outside of the lottery retailer's business premises, and is restricted to the advertising and promotion as permitted in Section 59-150-60(A)(17).

Section 59-150-170.   (A)   The commission shall establish a fidelity fund separate from all other funds and shall assess each lottery retailer a one-time fee not to exceed one hundred dollars for each sales location. Monies deposited into the fund may be used to cover losses the commission may experience due to nonfeasance, misfeasance, or malfeasance of a lottery retailer. The monies may be invested by the commission pursuant to state investment practices. All earnings attributable to the investments accrue to the fund. In addition, the funds may be used to purchase blanket bonds covering the commission against losses from all a lottery retailer. At the end of each fiscal year, the commission shall pay to the Education Lottery Account any amount in the fidelity fund which exceeds five hundred thousand dollars, and the funds paid must be treated as net proceeds from the lottery.

(B)   A reserve account may be established as a general operating expense to cover amounts considered uncollectible from the a lottery retailer. The commission shall establish procedures for minimizing losses that may be experienced by reason of nonfeasance, misfeasance, or malfeasance of a lottery retailer, and shall exercise and exhaust all available options in the procedures before amounts are written off to this account.

(C)   The commission may require a lottery retailer to post an appropriate bond, as determined by the commission, using an insurance company acceptable to the commission. The amount must not exceed the applicable district sales average of lottery game tickets for two billing periods.

(D)(1)   In its discretion, the commission may allow a lottery retailer to deposit and maintain with the commission securities that are interest bearing or accruing. Securities eligible pursuant to this item are limited to:

(a)   certificates of deposit issued by solvent banks or savings associations organized and existing under the laws of this State or under the laws of the United States;


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(b)   United States bonds, notes, and bills for which the full faith and credit of the United States is pledged for the payment of principal and interest; and

(c)   federal agency securities by an agency or instrumentality of the United States government.

(2)   The securities must be held in trust in the name of the commission.

Section 59-150-180.   (A)   A retail contract executed by the commission pursuant to this chapter must specify the reasons for which the contract may be canceled, suspended, revoked, or terminated by the commission including, but not be limited to:

(1)   a violation of this chapter, a regulation, or a policy or procedure of the commission;

(2)   failure to account accurately or timely for lottery game tickets, lottery games, revenues, or prizes as required by the commission;

(3)   fraud, deceit, or misrepresentation;

(4)   insufficient sales;

(5)   conduct prejudicial to public confidence in the lottery;

(6)   filing for or placement in bankruptcy or receivership of the lottery retailer;

(7)   a material change, as determined in the sole discretion of the commission, in a matter considered material by the commission in executing the contract with the lottery retailer; or

(8)   failure to meet any of the objective criteria established by the commission pursuant to this chapter.

(B)   If cancellation, denial, revocation, suspension, or rejection of renewal of a lottery retailer contract is in the best interest of the lottery, the public welfare, or the State of South Carolina, the executive director or his designee, in his discretion, may cancel, suspend, revoke, or terminate, after notice and a right to a hearing, a contract issued pursuant to this chapter. A hearing must be held within sixty days of notice of cancellation, suspension, revocation, or termination and conducted by the executive director or his designee. A party to the contract aggrieved by the decision of the executive director or his designee may appeal the adverse decision to the board, and then to the Administrative Law Judge Division, pursuant to the Administrative Procedures Act.

Section 59-150-190.   (A)   All proceeds from the sale of the lottery game tickets or shares constitute a trust fund until paid to the commission either directly or through the commission's authorized


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collection representative. A lottery retailer and officers of a lottery retailer's business have a fiduciary duty to preserve and account for lottery proceeds, and a lottery retailer personally is liable for all proceeds. Proceeds include unsold instant tickets received by a lottery retailer and cash proceeds of the sale of lottery products, net of allowable sales commissions and credit for lottery prizes sold or paid to winners by a lottery retailer. Sales proceeds and unused instant tickets must be delivered to the commission or its authorized collection representative upon demand.

(B)   The commission shall require a lottery retailer to place all lottery proceeds due the commission in accounts in institutions insured by the Federal Deposit Insurance Corporation (FDIC) no later than the close of the next banking day after the date of their collection by the lottery retailer until the date they are paid over to the commission. At the time of the deposit, lottery proceeds are considered the property of the commission, and a lottery retailer personally is liable for those proceeds due the commission. The commission may require a lottery retailer to establish a single separate electronic funds transfer account where available for the purpose of receiving monies from ticket or share sales, making payments to the commission, and receiving payments for the commission. Unless otherwise authorized in writing by the commission, each lottery retailer shall establish a separate bank account for lottery proceeds which must be kept separate and apart from all other funds and assets, and must not be commingled with any other funds or assets. A lottery retailer, upon the deposit of lottery proceeds in excess of insurance coverage by the FDIC, shall furnish an indemnity bond from a responsible surety company authorized to do business in this State in an amount sufficient to protect the State against loss in the event of insolvency or liquidation of the institution or for another cause. A lottery retailer, instead of the indemnity bond, may pledge as collateral for the deposits, obligations of the United States, obligations fully guaranteed both as to principal and interest by the United States, obligations of the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, the Federal Home Loan Mortgage Corporation, or general obligations of this State or a political subdivision of it. The State Treasurer shall exercise prudence in accepting the securities listed as collateral. The surety or collateral must be filed with the State Treasurer at time of deposit.

(C)   Proceeds from the sale of lottery game tickets or shares received by a lottery retailer who becomes insolvent or dies insolvent,


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are due the commission from the person or his estate in preference over all debts or demands.

(D)   A lottery retailer is not required to pay for lottery tickets or shares until the tickets or shares have been activated by the commission.

Section 59-150-200.   If a lottery retailer's rental payments for the business premises are contractually computed, in whole or in part, on the basis of a percentage of retail sales and the computation of retail sales is not defined explicitly to include sales of lottery game tickets or shares in a state operated or state managed lottery, only the compensation received by the lottery retailer from the commission may be considered the amount of the lottery retail sale for purposes of computing the rental payment.

Section 59-150-210.   (A)   A person shall not sell a lottery game ticket or share at a price other than that established by the commission. A person, other than a duly certified lottery retailer, shall not sell lottery game tickets, but a person may purchase lawfully lottery game tickets or shares and make a gift of the lottery game tickets or shares to another. The commission may designate certain agents and employees to sell lottery game tickets or shares directly to the public.

(B)   A lottery retailer shall not sell a lottery game ticket or share except from the locations listed in the lottery retailer's contract and as evidenced by the lottery retailer's certificate of authorization unless the commission authorizes, in writing, a temporary location not listed in the lottery retailer's contract.

(C)   Lottery game tickets or shares must not be sold to persons under eighteen years of age, but a person eighteen years of age or older may purchase lawfully lottery game tickets or shares and make a gift to a person of any age. If a minor lawfully receives a winning lottery game ticket, the commission may direct payment of proceeds of a lottery prize in an amount not exceeding two thousand five hundred dollars to the parent or guardian of the minor without court approval and without appointment of a conservator. In the case of a lottery prize greater than two thousand five hundred dollars and not exceeding twenty-five thousand dollars, payment must be made in accordance with the procedures outlined in Section 62-5-103 as they relate to distribution. In the case of a prize in an amount greater than twenty-five thousand dollars, payment must be made to a duly appointed conservator to be held for the benefit of the minor, pursuant to Section 62-5-433.


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(D)   A lottery ticket or share may not be sold on the date of any general elections; within three hundred feet of a church, school, or playground, as provided in Section 59-150-150(B)(2)(i); to a lottery game other than that defined in Section 59-150-20(7); or to a lottery game with corporate sponsorship.

Section 59-150-220.   (A)(1)   Upon the theft of instant tickets, a lottery retailer shall report immediately the theft to both the local law enforcement authority and to the commission's division of security.

(2)   If tickets are stolen before the book is activated, and no tickets within the book have been sold:

(a)   the lottery retailer must be charged a nonrefundable service fee for each incident in an amount determined by the commission to cover its costs only, so long as the name of the local law enforcement agency contacted and the assigned case number are furnished promptly to the commission;

(b)   if the name of the local law enforcement agency and the assigned case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, the commission shall charge the lottery retailer in accordance with subsection (3)(b).

(3)   If tickets are stolen after the book has been activated or tickets within the book have been sold:

(a)   a lottery retailer must be charged the net sales value (retail sales value less commission) for each book, less the low tier prize values of stolen tickets not paid at the time of the incident, so long as the lottery retailer furnished the name of the local law enforcement agency and the assigned case number to the commission;

(b)   if the name of a law enforcement agency and case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, credit for the unpaid low tier prizes must not be given and the lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4)   The commission shall adjust charges described in item (3) for the following reasons:

(a)   the commission shall charge a lottery retailer the low tier prize value of tickets that are presented to the commission as claims subsequent to the date of the incident. The commission shall determine which prizes must be subsequently paid based upon the facts of the incident, and that amount must be charged to the lottery retailer;


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(b)   the commission shall provide credit for recovered stolen tickets as follows:

(i)     the net sales value of the tickets recovered must be compared to the total value of the uncashed low tier prizes for each book of tickets. The lottery retailer shall receive credit for the greater of these two values;

(ii)   recovered tickets must be returned to the commission by the declared end of game redemption deadline or one hundred eighty days from the date of the incident, whichever is later. The game, book, and ticket number must be legible on each ticket for the lottery retailer to receive credit. If tickets are being held as evidence in a criminal investigation by a law enforcement agency, the commission shall accept a property report from that agency by the declared end of the game redemption deadline or one hundred eighty days from the date of the incident, whichever is later, detailing the game, book, and ticket number or Void If Removed Number (VIRN) for the tickets being held, as documentation to provide credit;

(iii)   recovered scratched tickets may be accepted for credit only if that condition of the tickets is identified in documentation provided to the commission by the local law enforcement agency;

(iv)   the lottery retailer shall receive no credit for recovered tickets that have been validated;

(v)   the commission shall determine the credits provided based upon the facts of the incident, and that amount must be credited to the lottery retailer.

(5)   Books reported to the commission as stolen must be marked in the commission's records to prevent validation and payment of prizes within the book.

(B)(1)   Upon the loss or damage of instant tickets, a lottery retailer immediately shall report the loss or damage to the both the local law enforcement authority and to the commission's division of security.

(2)   If tickets are damaged before the book is activated, no tickets within the book are sold, and all tickets in the book are returned to the commission, a lottery retailer may not be charged a service fee. If tickets are lost before the book is activated and no tickets within the book have been sold, a lottery retailer must be charged a nonrefundable service fee of twenty-five dollars for each incident for up to four books and five dollars for each book over four books.

(3)   If tickets are lost or damaged after the book is activated or if tickets within the book are sold, a lottery retailer must be charged the net sales value (retail sales value less commission) for each book.


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(4)   Upon the written approval by the commission, the commission shall provide credit for recovered lost or damaged tickets for the net sales value of the tickets recovered.

(a)   To receive approval, the lottery retailer shall provide the facts of the incident in writing to the commission for consideration.

(b)   The written request and recovered tickets must be returned to the commission by the redemption deadline and the game, book, and ticket number must be legible on each ticket in order for the lottery retailer to receive credit.

(c)   Scratched tickets must not be accepted for credit. A scratched ticket is one that in the commission's judgment has been compromised as to the security and integrity of the ticket due to removal of latex.

(d)   Tickets identified as validated before the recovery result in no credit to the lottery retailer.

(5)   Books reported to the commission as lost or damaged must be marked as such in the commission's records to prevent validation and payment of prizes within the book.

(6)   In the event of acts of God, occurrences of nature, or other natural disasters, the commission may waive the requirements of this subsection.

Section 59-150-230.   (A)   Lottery prizes are subject to the South Carolina state income tax. Residents and nonresidents of this State who receive a lottery prize in excess of five hundred dollars are subject to a mandatory withholding of state income tax as required by law. Federal income tax must be withheld from lottery prizes in excess of five thousand dollars. Neither the State nor a county, municipality, or other political subdivision of this State may impose a tax on the sale of a lottery ticket or share or on the payment of a prize pursuant to this chapter; nor may a county, municipality, or other political or public subdivision assess an ad valorem tax against a lottery ticket or share bought or sold pursuant to this chapter.

(B)   Except as otherwise provided in this chapter, attachments, garnishments, or executions authorized and issued pursuant to law must be withheld if timely served upon the commission. This subsection does not apply to a lottery retailer.

(C)   The commission shall promulgate regulations and adopt policies and procedures to establish a system of verifying the validity of lottery games tickets or shares claimed to win prizes and to effect payment of prizes.


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(1)   A prize, a portion of a prize, or a right of a person to a prize awarded is not assignable except as provided in this section. A prize or a portion of a prize remaining unpaid at the death of a prize winner must be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the commission with a notarized letter of direction from the settlor and no written notice of revocation has been received by the commission before the settlor's death. Following a settlor's death and before payment to a trustee, the commission shall obtain from the trustee a written agreement to indemnify and hold the commission harmless with respect to claims that may be asserted against the commission arising from payment to or through the trust. Notwithstanding any other provisions of this section, a person, pursuant to an appropriate judicial order, may be paid the prize to which a winner is entitled.

(2)   (a)   If the winner of a lottery game prize elects to receive his prize by way of deferred payments, the commission must deposit, in the same quarter as the prize was won and in a restricted account, the total amount of the prize. The deferred payments to the winner of the lottery game prize must be paid out only from that restricted account.

(b)   The restricted account provided in subitem (a) must be known as the 'Deferred Lottery Prize Payment Account'. The monies in the restricted account may be used only for the purpose of making deferred payments of a lottery game prize as elected by a prize winner. The monies in the Deferred Lottery Prize Payment Account may not be used to determine the assets of the commission, except to manifest them as encumbered.

(c)   The State Treasurer may invest the monies deposited in the Deferred Lottery Prize Payment Account as provided by law.

(3)   A prize must not be paid if it:

(a)   arises from claimed lottery game tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;

(b)   lacks captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or

(c)   fails to comply with additional specific regulations and public or confidential validation and security tests of the commission appropriate to the particular lottery game involved.

(4)   A particular prize in a lottery game must not be paid more than once, and if more than one person is entitled to a particular prize,


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the sole remedy of those persons is the award to each of them of an equal share in the prize.

(5)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days, or for a multi-state lottery game within one hundred eighty days, after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter.

(D)   A prize must not be paid upon a lottery game ticket or share purchased or sold in violation of this chapter and is an unclaimed prize for purposes of this section.

(E)   The commission is discharged of all liability upon payment of a prize.

(F)   A lottery game ticket or share must not be purchased by and a prize must not be paid to a member of the board, an officer or employee of the commission, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence. A lottery game ticket or share must not be purchased by and a prize must not be paid to an officer, employee, agent, or a subcontractor of a lottery vendor, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence if he has access to confidential information that may compromise the integrity of the lottery.

(G)   A lottery prize may not be paid to a person who is incarcerated or on probation or parole. A lottery prize payment received in violation of this subsection must be returned immediately and in full to the commission.

(H)   The use of an electronic or mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and their employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense as a prize coins or currency. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40 and 16-19-50.

(I)   Unclaimed prize money must be deposited in the Education Lottery Account each year. A portion, in an amount to be determined by the General Assembly, of the unclaimed prize money in the Education Lottery Account, must be allocated by the General


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Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the South Carolina Department of Alcohol and Other Drug Abuse Services for the treatment of compulsive gambling disorder and educational programs related to that disorder, including a gambling hotline. The Director of the DAODAS shall report to the board on the programs implemented with these funds, and provide a copy of the report to the General Assembly.

Section 59-150-240.   (A)   The commission is subject to the provisions of Chapter 4, Title 30 the South Carolina Freedom of Information Act.

(B)   The commission shall perform full criminal background investigations before the execution of a lottery vendor contract.

(C)   The commission or its authorized agent shall:

(1)   conduct criminal background investigations and credit investigations on all potential a lottery retailer and employees;

(2)   supervise lottery game ticket or share validation and lottery drawings;

(3)   inspect, at times determined solely by the commission, the facilities or operations of a lottery vendor or lottery retailer to determine the integrity of the lottery vendor's product or compliance by the lottery retailer or lottery vendor with its contract;

(4)   report suspected violations of this chapter to the appropriate investigative and prosecutorial agency having jurisdiction over the violation; and

(5)   upon request, provide assistance to a solicitor, the Attorney General, or a law enforcement agency investigating a violation of this chapter.

Section 59-150-250.   (A)   A person who knowingly sells a lottery game ticket or share to a person under eighteen years of age or permits a person under eighteen years of age to play a lottery game is guilty of a misdemeanor and, upon conviction, must be fined not less than one hundred dollars nor more than five hundred dollars or be imprisoned not less than thirty days nor more than sixty days, or both, in the discretion of the court. It is an affirmative defense to a charge of a violation of this section that the lottery retailer reasonably and in good faith relied upon representation of proof of age in making the sale.

(B)   A person under eighteen years of age who knowingly purchases a lottery game ticket is guilty of a misdemeanor and, upon conviction, must perform twenty hours of community service or must


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be fined not less than one hundred dollars and not more than five hundred dollars.

(C)   A lottery ticket or share must bear a conspicuous label prohibiting the play of the game by a person under eighteen years of age.

(D)   A lottery game using an electronic or mechanical device must bear a conspicuous label prohibiting the use of the device by a person under eighteen years of age. Electronic or mechanical device does not include machines and other gaming devices including video poker and games prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   A person who is incarcerated or on probation or parole who knowingly accepts a lottery prize is guilty of a misdemeanor and, upon conviction, must be fined not less than ten dollars nor more than one hundred dollars or imprisoned for not less than two days nor more than thirty days, or both.

(F) A person who is convicted of a violation of subsection (A) subjects his employer, for a first violation, to a fine not less than one hundred dollars nor more than two hundred fifty dollars; for a second violation, to a fine not less than two hundred fifty-one dollars nor more than five hundred dollars; and for a third and subsequent violation, to a fine not less than five hundred and one dollars and immediate license revocation by the commission.

Section 59-150-260.   (A)   A person who, with intent to defraud, falsely makes, alters, forges, utters, passes, or counterfeits a state lottery game ticket is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(B)   A person who influences or attempts to influence the winning of a prize through the use of coercion, fraud, deception, or tampering with lottery equipment or materials is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(C)   A person who is convicted of a violation of subsection (A) or (B) must not be the recipient of an award of a lottery prize or a portion of a lottery prize, and is ineligible for employment by the commission.

Section 59-150-270.   (A)   A person must not knowingly or intentionally make a material false statement in an application for a license or proposal to conduct lottery activities or a material false entry in a book or record which is compiled or maintained or submitted to the board or its designee pursuant to the provisions of this chapter. A person who violates the provisions of this section is guilty of a felony


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and, upon conviction, must be fined not more than twenty-five thousand dollars or the dollar amount of the false entry or statement, whichever is greater, or imprisoned for not more than five years, or both.

(B)   A person who is convicted of a violation of subsection (A) also must surrender his license immediately and is ineligible to be issued a license by the commission.

Section 59-150-280.   (A)   The commission may enter into intelligence sharing, reciprocal use, or restricted use agreements with the federal government, law enforcement agencies, lottery regulation agencies, and gaming enforcement agencies of other jurisdictions which provide for and regulate the use of information provided and received pursuant to the agreement.

(B)   Records, documents, and information in the possession of the commission received pursuant to an intelligence sharing, reciprocal use, or restricted use agreement entered into by the commission with a federal department or agency, a law enforcement agency, or the lottery regulation or gaming enforcement agency of a jurisdiction are considered investigative records of a law enforcement agency and are subject to the confidentiality and disclosure policies, and must not be released without the permission of the person or agency providing the record or information, except as may be required by the Freedom of Information Act.

Section 59-150-290.   The commission shall enter into its contracts for procurements in compliance with the South Carolina Consolidated Procurement Code.

Section 59-150-300.   (A)   Any lottery retailer, lottery vendor, applicant for a lottery retailer license, or lottery game ticket holder aggrieved by an action of the board may appeal that decision to the Administrative Law Judge Division. The action is subject to review by an administrative law judge on the record of the board, upon petition of the aggrieved person within ten days from receipt of official notice from the board of the action of which review is sought. Service of notice is presumed conclusively ten days after mailing by registered or certified mail to the applicant or licensee of notice at his last known address. An appeal to the Administrative Law Judge Division pursuant to this section is a contested case as defined by the Administrative Procedures Act, and subject to the procedural due process requirements provided for in Article 5, Chapter 23, Title 1 and the Rules of Procedure of the Administrative Law Judge Division. Appeals


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regarding lottery vendor contracts must be brought pursuant to the South Carolina Procurement Code.

(B)   The Administrative Law Judge Division shall hear appeals from decisions of the board and, based upon the record of the proceedings before the board, may reverse the decision of the board only if the appellant proves the decision to be:

(1)   in violation of constitutional or statutory provisions;

(2)   in excess of the statutory authority of the board;

(3)   made upon unlawful procedure;

(4)   affected by other error of law;

(5)   clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6)   arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

(C)   The Administrative Law Judge Division may remand an appeal to the board to conduct further hearings.

(D)   For judicial review of a final decision of an administrative law judge in a case involving the commission, the petition by an aggrieved party must be filed with the circuit court and served on the opposing party not more than thirty days after the aggrieved party receives the final decision and order of the administrative law judge. Appeal in these matters is by right.

(E)   A lottery vendor who appeals the award of a procurement contract for the supply of a lottery game ticket system, share system, or an on-line or other mechanical or electronic system is liable for all costs of appeal and defense if the appeal is denied or the contract award is upheld. Cost of appeal and defense specifically includes, but is not limited to, administrative proceedings, court costs, bond, legal fees, and loss of income to the commission resulting from institution of the appeal if, upon the motion of the commission, the court finds the appeal was frivolous.

(F)   All actions and proceedings for review pursuant to this chapter, and all actions and proceedings to which the commission may be a party and in which a question arises pursuant to this chapter or pursuant to or concerning any order or decision of the commission must be given priority of hearing in all courts and reviewing entities over all other civil causes except election cases irrespective of position on the calendar.

Section 59-150-310.   (A)   The commission may expend, pursuant to the provisions of this chapter, monies received from any source, including income from the commission's operations, for effectuating


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its purposes, including the payment of the initial expenses of organization, administration, and operation of the commission and the lottery.

(B)   The commission must be self-sustaining and self-funded. Monies in the state general fund may not be used or obligated to pay the expenses of the commission or prizes of the lottery, and a claim for the payment of an expense of the lottery or prizes of the lottery may not be made against monies other than monies credited to the commission operating account.

(C)   The commission may purchase, lease, or lease-purchase goods or services necessary for effectuating the purposes of this chapter. The commission may make procurements which integrate functions such as lottery game design, lottery ticket distribution to a lottery retailer, supply of goods and services, and advertising. In all procurement decisions, the commission shall act to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objectives of raising net proceeds for the benefit of educational programs and purposes.

Section 59-150-320.   To ensure the financial integrity of the lottery, the commission, through its board, shall:

(1)   submit quarterly and annual reports to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the Comptroller General, the State Treasurer, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee disclosing the total lottery revenues, prize disbursements, operating expenses, and administrative expenses of the commission during the reporting period. The annual report additionally must describe the organizational structure of the commission, summarize the functions performed by each organizational division within the commission, and contain a detailed budget for the next fiscal year. The quarterly reports must be submitted within fifteen days of the end of the quarter, and the annual report must be submitted by October fifteenth;

(2)   adopt a system of internal audits;

(3)   maintain weekly or more frequently records of lottery transactions including the distribution of lottery game tickets or shares to a lottery retailer, revenues received, claims for prizes, prizes paid, prizes forfeited, and other financial transactions of the commission;

(4)   authorize the State Auditor to contract with a certified public accountant or firm for an independently audited financial statement prepared in accordance with generally accepted accounting principles,


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to be submitted to the Comptroller General's office each year no later than October fifteenth. The certified public accountant or firm shall not have a financial interest in a lottery vendor with whom the commission is under contract. The certified public accountant or firm shall evaluate the internal auditing controls in effect during the audit period. The cost of this annual financial audit is an operating expense of the commission. The State Auditor may at any time conduct an audit of any phase of the operations of the commission at the expense of the State and shall receive a copy of the annual independent financial audit. A copy of an interim audit performed by the certified public accountant or firm or the State Auditor must be transmitted after the close of the commission's fiscal year to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the State Treasurer, the Comptroller General, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee;

(5)   submit, for informational purposes only, to the Office of State Budget of the Budget and Control Board and the State Auditor by June thirtieth of each year a copy of the annual operating budget for the commission for the next fiscal year. This annual operating budget must be approved by the South Carolina Lottery Commission Board;

(6)   submit, for informational purposes only, to the Office of State Budget on November tenth of each year a proposed operating budget for the commission for the upcoming fiscal year;

(7)   adopt the same fiscal year as that used by state government; and

(8)   authorize the Legislative Audit Council to contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not have a financial interesting a lottery vendor with whom the commission is under contract The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation.

Section 59-150-330.   (A)   All claimant agencies of this State and persons on whose behalf the State and its claimant agencies act, in conjunction with the commission, shall cooperate in identifying debtors who owe money to the State and who qualify for prizes pursuant to this chapter from the commission; and the sum of any debt owed to the State or to persons on whose behalf the State and its claimant agencies


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act must be set off against a prize awarded pursuant to this chapter. This section must be liberally construed to effectuate these purposes.

(B)   As used in this section:

(1)   'Claimant agency' means any state or local agency, department, board, bureau, commission, or authority to which an individual owes a debt or which acts on behalf of an individual to collect a debt.

(2)   'Debt' means a liquidated sum due and owing a claimant agency, which sum has accrued through contract, subrogation, tort, or operation of law regardless of whether there is an outstanding judgment for the sum, or a sum which is due and owing a person and is enforceable by the State or any of its agencies or departments.

(3)   'Debtor' means an individual owing money to or having a delinquent account with a claimant agency, which obligation has not been adjudicated as satisfied by court order, set aside by court order, or discharged in bankruptcy.

(4)   'Prize' means the proceeds of a lottery prize awarded pursuant to this chapter.

(C)   The collection remedy authorized by this section is in addition to and not in substitution for any other remedy available by law.

(D)(1)   A claimant agency may submit to the commission a list of the names of all persons owing debts in excess of one hundred dollars to the claimant agency or to persons on whose behalf the claimant agency acts. The full amount of the debt is collectible from lottery winnings without regard to limitations on the amounts that may be collectible in increments through garnishment or other proceedings. The list constitutes a valid lien upon and claim of lien against the lottery winnings of a debtor named in the list. The list must contain the names of the debtors, their Social Security numbers if available, and other information which would assist the commission in identifying the debtors named in the list.

(2)   The commission shall withhold winnings subject to the lien created by this section and send notice to the winner by certified mail, return receipt requested, of such action and the reason why the winnings were withheld. If the winner appears and claims winnings in person, the commission shall notify the winner at that time, by hand delivery, of the action. If the debtor does not protest, in writing, the withholding of the funds within thirty days of notice, the commission shall pay the funds over to the claimant agency. If the debtor protests the withholding of funds, in writing, within thirty days of the notice,


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the commission shall file an action in interpleader in the circuit court of the county in which the debtor resides, pay the disputed sum into the court, and give notice to the claimant agency and debtor of the initiation of the action.

(3)   The liens created by this section rank among themselves as follows:

(a)   taxes due the State;

(b)   delinquent child support;

(c)   delinquent student loans; and

(d)   all other judgments and liens in order of the date entered or perfected.

(4)   The commission is not required to deduct claimed debts from prizes paid out by a lottery retailer or entities other than the commission.

(5)   A list of debtors and debts must be provided, pursuant to this section, periodically as the commission determines by rules and regulations, and the commission is not obligated to retain the lists or deduct debts appearing on the lists beyond the period determined by the rules and regulations.

(6)   The commission may prescribe forms, propose rules, and promulgate regulations necessary to carry out the provisions of this section.

(7)   The commission and a claimant agency do not incur civil or criminal liability for good faith adherence to the provisions of this section.

(8)   The claimant agency shall pay the commission for all costs incurred by the commission in setting off debts in the manner provided in this section. The commission may retain this fee as part of administrative expenses.

(E)(1)   Notwithstanding Section 59-150-240 or other confidentiality law, the commission may provide to a claimant agency all information necessary to accomplish and effectuate the intent of this section.

(2)   The information obtained by a claimant agency from the commission pursuant to this section must retain its confidentiality and may be used only by a claimant agency in the pursuit of its debt collection duties and practices. An employee or former employee of a claimant agency who unlawfully discloses this information for another purpose, except as otherwise specifically authorized by law, is subject to penalties as provided by law.


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(F)   The provisions of this section apply to prizes of six hundred dollars or more.

Section 59-150-340.   The net proceeds received from the state lottery for education as provided by law must be deposited by the State Treasurer in a fund separate and distinct from the state general fund entitled the 'Education Lottery Account'. All interest or income earned by the fund must be retained in the account and used for its stated purposes. However, all revenue received by the Education Lottery Account in any fiscal year together with earnings on it for that year must be disbursed as required by Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. It is the intent of the General Assembly in creating this Education Lottery Account that its funds be managed so as to establish and fund these programs permanently. Upon receipt of monies transferred to the Education Lottery Account held by the State Treasurer, these monies must be appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the programs and for the purposes stipulated in Section 59-150-350. The Comptroller General shall record these revenues received on a cash basis, and disbursements for the purposes provided also must be on a cash basis; however, unexpended funds at the end of a fiscal year after disbursement to the programs authorized to receive the funds as provided in Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years may be carried forward to future years and expended for the same purposes.

Section 59-150-350.   (A)   All lottery proceeds are the property of the commission, to be held in a separate and distinct account, apart from the State Treasury. Annual administrative expenses may not exceed fifteen percent of gross lottery revenues for the year, including lottery retailer commissions and incentives. The General Assembly shall consider, in the allocation of funds from the Education Lottery Account, the allocation of monies in the amount the General Assembly determines for the Commission on Higher Education and for the Administrative Law Judge Division, both to help defray their expenses incurred in the performance of their duties pursuant to this chapter; except that the amount of funding for the Commission on Higher Education and the Administrative Law Judge Division must be allocated by the General Assembly in its annual general appropriations


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bill or any bill appropriating monies for previous or current fiscal years. As nearly as practical, an amount no less than forty-five percent of the amount of money from the actual sale of lottery tickets or shares must be made available as prize money, except that this item does not create a lien, an entitlement, a cause of action, or other private right, and rights of holders of tickets or shares must be determined by the commission in setting the terms of its lottery or lotteries.

(B)   Before the sixteenth day of each month, the commission shall deposit to the State Treasurer, for credit to the Education Lottery Account for the preceding month, the amount of all net proceeds from the preceding month. The State Comptroller General shall account separately for net proceeds by establishing and maintaining a restricted account known as the Education Lottery Account. Upon their deposit with the State, monies representing a deposit of net proceeds become the unencumbered property of the State of South Carolina and the commission may not agree or undertake otherwise. The monies may be invested by the State Treasurer pursuant to state investment practices. All earnings attributable to the investments are also the unencumbered property of the State and accrue to the credit of the Education Lottery Account.

(C)   At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds. Appropriations from the Education Lottery Account must be allocated only for educational purposes and programs by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated to full funding of the LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as provided in Sections 59-149-10(E) and 59-149-50(D) and (E), and funding with all the remaining revenues for: elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and


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universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences, and Youth Education Scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations bill, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child. These programs may include, but are not limited to, language and literacy programs that help the child understand and tell stories, recognize pictures and words, learn the alphabet, and understand that writing is communication; math concepts that teach the child to count and sort objects into groups, recognize shapes, and make comparisons of size, shape, length, and weight; science concepts that teach the child to explore the natural environment, observe seasonal changes, communicate observations, and use tools to measure; art concepts that help the child express ideas and thoughts in creative ways, paint, draw, and sculpt, listen to music and sing songs, and recognize colors; and physical development activities that help the child move with balance and coordination, participate in indoor and outdoor physical activity, and use writing tools, puzzles, scissors, blocks, clay, and computers. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.

(D)   Appropriations by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years for educational purposes and programs from the account not committed during the fiscal year must be credited to the Education Lottery Account.

(E)(1)   A program or project started specifically from lottery proceeds may not be continued from the general fund, but the programs must be adjusted or discontinued according to available lottery


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proceeds, unless the General Assembly by general law establishes eligibility requirements and later appropriates specific funds within the general appropriations act. The provisions of this subsection do not prohibit the providing of supplemental funding to programs or projects in existence on the effective date of this chapter from lottery proceeds; provided, that funding for these existing programs or projects from the state general fund, the Education Improvement Act, or other nonlottery sources may not be reduced below that provided on the effective date of this chapter.

(2)   A surplus in the Education Lottery Account may not be reduced by the General Assembly to correct any nonlottery deficiencies in sums available for general appropriations and vice versa, and a surplus in the Education Lottery Account may not be included in a surplus calculated for setting aside any nonlottery reserve, specifically, without limitation, the General Reserve Fund or the Capital Reserve Fund."
SECTION   3.   Section 59-149-10 of the 1976 Code is amended by adding at the end to read:

"(E)(1)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as defined in this chapter is increased to the cost of tuition for thirty credit hours a year or its equivalent plus a three hundred dollar a year book allowance. Tuition for this purpose means the amount charged for registering for credit hours of instruction and shall not include other fees, charges, or costs of textbooks except for the referenced three hundred dollar book allowance.

(2)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year independent institution must continue to be the cost of attendance up to a maximum of three thousand dollars a year, and the annual amount for eligible resident students attending a two-year independent institution must increase to the cost of attendance up to a maximum of no more than the cost of tuition at a two-year regional public institution for thirty credit hours a year or its equivalent.

(3)   Beginning with the school year 2002-2003, the requirement that high school completion be accomplished on or after May 1995, for eligibility for the LIFE Scholarship is waived."
SECTION   4.   Section 59-149-50 of the 1976 Code is amended by adding subsections (D) and (E) to read:


Printed Page 3123 . . . . . Thursday, May 3, 2001

"(D)   Beginning with school year 2002-2003, an entering freshman to be eligible for a LIFE Scholarship in addition to the other requirements of this chapter shall meet two of the following three criteria:

(1)   have the grade point average required by this section;

(2)   have the Scholastic Aptitude Test (SAT) or equivalent ACT score required by this section;

(3)   be in the top thirty percent of his high school graduating class.

For home school students and students whose high school graduating class is less than fifty students, the Commission on Higher Education may define alternative criteria for students to meet the requirement of item (3).

After receipt of a LIFE Scholarship by an entering freshman beginning with school year 2002-2003, a student shall meet the criteria established in this chapter to retain or regain the scholarship.

(E)   Notwithstanding the provisions of this section and the other requirements of this chapter, beginning with school year 2002-2003, students attending a technical college of this State taking not less than eighteen credit hours of instruction a year but less than thirty credit hours a year who are otherwise eligible for a LIFE scholarship shall receive a LIFE scholarship equal to one-half the amount that eligible students receive at the technical college who take at least thirty credit hours of instruction a year."
SECTION   5.   The 1976 Code is amended by adding:

"Section 2-15-63.   (A)   Beginning in December 2004 and every three years after that, the Legislative Audit Council shall conduct a management performance audit of the South Carolina Lottery Commission. The cost of this audit is an operating expense of the commission.

(B)   Nothing in this section limits, abridges, or otherwise affects the provisions of Section 2-15-60.

(C)   The Legislative Audit Council may contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not have a financial interest in a lottery vendor with whom the commission is under contract. The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation."


Printed Page 3124 . . . . . Thursday, May 3, 2001

SECTION   6.   Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item to read:

"( )   a lottery ticket sold pursuant to Chapter 150 of Title 59;"
SECTION   7.   Section 59-63-210 of the 1976 Code is amended to read:

"Section 59-63-210.   (A)   Any district board of trustees may authorize or order the expulsion, suspension, or transfer of any pupil for a the commission of any crime, gross immorality, gross misbehavior, persistent disobedience, or for violation of written rules and promulgated regulations established by the district board, county board, or the State Board of Education, or when the presence of the pupil is detrimental to the best interest of the school. Every Each expelled pupil shall have has the right to petition for readmission for the succeeding school year. Expulsion or suspension shall must be construed to prohibit a pupil from entering the school, or school grounds, except for a prearranged conference with an administrator, attending any day or night school functions, or riding a school bus. The provisions of this section shall do not preclude enrollment and attendance in any adult or night school.

(B)   A district board of trustees shall not authorize or order the expulsion, suspension, or transfer of any pupil for a violation of Section 59-150-250(B)."
SECTION   8.   Except for Section 59-150-350(C), (D), and (E), provisions of this chapter relating to guidelines for the appropriation of lottery proceeds must not be amended in a general appropriations act, but only in a separate piece of legislation solely for that purpose and by a majority vote of those present and voting in both houses of the General Assembly.
SECTION   9.   The General Assembly shall review and evaluate, on a regular basis but at least biannually, the operation of the South Carolina Education Lottery and the success and efficiency with which the South Carolina Lottery Commission has undertaken that responsibility. The General Assembly, after each review and evaluation, may determine to:

(1)   transfer the whole or any part of the functions of the commission to the jurisdiction and control of any other agency;

(2)   consolidate, coordinate, or combine the functions of the commission with any other agency;

(3)   redirect any mission of the commission;

(4)   abolish any mission of the commission in whole or any part; or

(5)   abolish all or any part of the functions of the commission.


Printed Page 3125 . . . . . Thursday, May 3, 2001

SECTION   10.   Criminal penalties contained in Chapter 150, Title 59 apply only to offenses committed on or after the effective date of this act.
SECTION   11.   The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release, or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision so expressly provides. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION   12.   If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding does not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION   13.   This act takes effect upon approval by the Governor. /
Amend title to conform.

Rep. HARRELL moved to table the amendment, which was agreed to.

Rep. COBB-HUNTER proposed the following Amendment No. 16 (Doc Name COUNCIL\SWB\AMEND\5449MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-230(G), SECTION 2, by deleting:
/ or on probation or parole /.
Amend further Section 59-150-250(E), SECTION 2, by deleting:
/ or on probation or parole /.


Printed Page 3126 . . . . . Thursday, May 3, 2001

Renumber sections to conform.
Amend title to conform.

Rep. COBB-HUNTER explained the amendment.

Rep. HARRELL moved to table the amendment.

Rep. MCLEOD demanded the yeas and nays which were taken, resulting as follows:

Yeas 70; Nays 40

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Dantzler
Davenport              Delleney               Easterday
Edge                   Fleming                Frye
Gilham                 Hamilton               Harrell
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Kirsh
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Loftis                 Lucas                  Martin
McCraw                 McGee                  Merrill
Owens                  Perry                  Phillips
Quinn                  Rice                   Riser
Robinson               Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Stuart                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   Whatley
White                  Wilkins                Young, A.
Young, J.

Total--70


Printed Page 3127 . . . . . Thursday, May 3, 2001

Those who voted in the negative are:
Allen                  Askins                 Bales
Battle                 Breeland               Brown, G.
Brown, R.              Carnell                Clyburn
Cobb-Hunter            Coleman                Emory
Freeman                Gourdine               Govan
Hayes                  Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Kennedy                Lee                    Lloyd
Mack                   McLeod                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Parks                  Rhoad                  Rivers
Scott                  Sheheen                Smith, F.N.
Snow                   Weeks                  Whipper
Wilder

Total--40

So, the amendment was tabled.

Rep. HARRELL proposed the following Amendment No. 23 (Doc Name COUNCIL\GJK\AMEND\20597SD01), which was adopted:
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION   1.   The General Assembly finds that:

(1)   net proceeds of lottery games conducted pursuant to this chapter must be used to support improvements and enhancements for educational purposes and educational programs as provided by the General Assembly and that the net proceeds must be used to supplement, not supplant, existing resources for educational purposes and programs;

(2)   lottery games are an entrepreneurial enterprise and that the State shall create an instrumentality of the State and public body, corporate and politic, known as the South Carolina Lottery Commission, with the comprehensive and extensive powers as generally exercised by commissions engaged in entrepreneurial pursuits;

(3)   lottery games must be operated and managed in a manner which ensures that the lottery is operated with integrity and dignity and free of political influence, maximizes the use of revenues, and provides continuing entertainment to the public;


Printed Page 3128 . . . . . Thursday, May 3, 2001

(4)   the South Carolina Lottery Commission must be accountable to the General Assembly and to the public through a system of audits and reports; and

(5)   this act is not a bill appropriating money out of the State Treasury as contemplated by Section 21 of Article IV of the Constitution of this State and, therefore, is not subject to a line item or section objection or veto by the Governor. It is the intent of the General Assembly that this act merely specify the educational purposes and programs, and parameters, for funding by the General Assembly through the annual general appropriations bill or any bill appropriating monies for previous or current fiscal years.
SECTION   2.   Title 59 of the 1976 Code is amended by adding:

"CHAPTER 150
South Carolina Education Lottery Act

Section 59-150-10.   This chapter may be cited as the 'South Carolina Education Lottery Act'.

Section 59-150-20.   As used in this chapter:

(1)   'Administrative expenses' means operating expenses, excluding amounts set aside for prizes, regardless of whether the prizes are claimed, and excluding amounts held as a fidelity fund pursuant to Section 59-150-170.

(2)   'Board' means the Board of Commissioners of the South Carolina Lottery Commission.

(3)   'Commission' means the South Carolina Lottery Commission.

(4)   'Educational purposes and programs' means educational expenses and scholarships as defined in Section 59-150-350(C).

(5)   'Executive Director' means the Executive Director of the South Carolina Lottery Commission or his designee.

(6)   'Immediate family' means a person who is:

(a)   a spouse;

(b)   a child residing in the same household; or

(c)   claimed as a dependent for income tax purposes.

(7)   'Lottery', 'lotteries', 'lottery game', or 'lottery games' means a game of chance approved by the General Assembly and operated pursuant to this chapter including, but not limited to, instant tickets, on-line lottery games, and drawing numbers, but excluding keno, pari-mutuel betting, and casino gambling as defined in this section. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50. The access and use of an


Printed Page 3129 . . . . . Thursday, May 3, 2001

electronic or a mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and his employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense anything other than lottery tickets.

As used in this item, 'casino gambling' means a location or business for the purpose of conducting unlawful gambling activities, but excluding the sale and purchase of lottery game tickets or shares; and 'pari-mutuel betting' means a method or system of wagering on actual races including races involving horses or dogs at tracks and the distribution of winnings by pools.

(8)   'Lottery retailer' means a person who sells lottery game tickets or shares on behalf of the South Carolina Lottery Commission pursuant to a contract.

(9)   'Lottery vendor' means a person who provides or proposed to provide goods or services to the South Carolina Lottery Commission pursuant to a procurement contract, but does not include an employee of the commission, a lottery retailer, or a state agency or instrumentality of the State. The term includes a corporation whose shares are traded publicly and which is the parent company of the contracting party in a procurement contract.

(10)   'Major procurement contract' means a gaming product or service costing in excess of seventy-five thousand dollars including, but not limited to, major advertising contracts, annuity contracts, prize payment agreements, consulting services, equipment, tickets, and other products and services unique to the South Carolina lottery but not including materials, supplies, equipment, and services common to the ordinary operations of a business.

(11)   'Member' or 'members' means a Commissioner or Commissioners of the Board of the South Carolina Lottery Commission.

(12)   'Minority business' means a business which meets the definition of a socially and economically disadvantaged small business as described in Article 21, Chapter 35, Title 11, specifically a small business concern which:

(a)   is at least fifty-one percent owned by one or more citizens of the United States who are determined to be socially and economically disadvantaged;

(b)   in the case of a concern which is a corporation, at least fifty-one percent of all classes of voting stock of such corporation is


Printed Page 3130 . . . . . Thursday, May 3, 2001

owned by an individual determined to be socially and economically disadvantaged; or

(c)   in the case of a concern which is a partnership, at least fifty-one percent of the partnership interest is owned by an individual or individuals determined to be socially and economically disadvantaged or whose management and daily business operations are controlled by individuals determined to be socially and economically disadvantaged. Those individuals must be involved in the daily management and operations of the business concerned.

'Small business' as used in this item means a business which meets the definition of a small business for purposes of the Small Business Administration, an agency of the United States.

(13)   'Net proceeds' means all revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery games, less operating expenses and prizes.

(14)   'Operating expenses' means all costs of doing business including, but not limited to, prizes, commissions, and other compensation paid to a lottery retailer, advertising and marketing costs, rental fees, personnel costs, capital costs, depreciation of property and equipment, funds for compulsive gambling education and treatment, amounts held in or paid from a fidelity fund pursuant to Section 59-150-170, and other operating costs, including funds to the Commission on Higher Education and the Administrative Law Judge Division toward their expenses incurred in performance of their duties pursuant to this chapter.

(15)   'Person' means an individual, corporation, partnership, unincorporated association, or other legal entity.

(16)   'Prize' means an award, gift, or anything of value regardless of whether there are conditions or restrictions attached to its receipt.

(17)   'Proceeds' means all lottery revenue derived from the sale of lottery game tickets or shares and all other monies derived from the lottery or received by the commission.

(18)   'Share' means an intangible interest in a lottery ticket, by way of assignment, contractual participation, or other claim or right, subject to proof.

(19)   'Ticket' means tangible evidence issued by the South Carolina Lottery Commission to provide participation in a lottery game.

(20)   'Panel' means the House and Senate members appointed by the President Pro Tempore of the Senate and the Speaker of the House


Printed Page 3131 . . . . . Thursday, May 3, 2001

of Representatives pursuant to the provisions of Section 59-150-40(B)(5).

Section 59-150-30.   (A)   There is created a commission to be known as the South Carolina Lottery Commission, which is deemed to be a public commission and an instrumentality of the State. The commission and its employees are subject to the South Carolina Consolidated Procurement Code, South Carolina Administrative Procedures Act, South Carolina Ethics Reform Act, and South Carolina Freedom of Information Act. Venue for the commission is in Richland County.

(B)   Beginning in December 2004 and every three years after that, or by the request of five members of the House of Representatives or five members of the Senate, the Legislative Audit Council shall conduct a management performance audit of the commission. The cost of this audit is an operating expense of the commission.

(C)   Jurisdiction for investigation of allegations of criminal violations and for enforcement of criminal penalties for violations of the provisions of this chapter lies with the Statewide Grand Jury.

Section 59-150-40.   (A)   The commission is governed by a board composed of nine members to be appointed as follows: three members must be appointed by the Governor, three members must be appointed by the President Pro Tempore of the Senate, and three members must be appointed by the Speaker of the House of Representatives.

(B)   A member must:

(1)   be a resident of the State of South Carolina;

(2)   not have been convicted of a felony offense or bookmaking or other form of unlawful gambling. A background investigation must be conducted on each board nominee. The commission shall pay for the cost of the investigation and may contract with the State Law Enforcement Division (SLED) or appropriate federal agency for the performance of the investigation;

(3)   meet the qualifications for electors as provided in Section 7-5-120;

(4)   not have been an elected public official, as provided in Section 24, Article III of the Constitution of this State and Section 2-1-100, for at least two years before appointment; and

(5)   have been screened by a panel pursuant to procedures it establishes and found by the panel to meet the statutory qualifications and considerations for appointment to the board. The Governor, Speaker of the House of Representatives, and the President Pro Tempore of the Senate each shall submit the names of his potential


Printed Page 3132 . . . . . Thursday, May 3, 2001

board appointees to the panel. If the panel finds the potential appointee meets or does not meet the statutory qualifications, it shall notify the appointing authority who submitted the name. A potential appointee found not statutorily qualified by the panel may not be appointed to the board. The screening panel is composed of ten members: five selected by the President Pro Tempore of the Senate and five selected by the Speaker of the House of Representatives. The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each select three members of their respective bodies and two members from the public to serve on the screening panel. The members of the panel serve four-year terms. The investigation and consideration by the panel of a potential appointee is limited to the statutory qualifications established pursuant to this chapter. A panel member may be removed upon unanimous vote of the appointing authorities, or for cause by his appointing authority for malfeasance, incompetency, conflict of interest, misconduct, persistent neglect of duty in office, or incapacity.

(C)   In making appointments to the board, the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives, as appropriate, shall consider legal, financial, accounting, and marketing experience and race, gender, and other demographics factors to ensure nondiscrimination, inclusion, and representation of all segments of the State to the greatest extent possible.

(D)   The members shall serve terms of three years, except that of the initial appointments the Governor shall appoint two members, each to serve a two-year term, and one member to serve a four-year term; the Speaker of the House of Representatives shall appoint three members, each to serve a two-year term, co-terminus with the Speaker; and the President Pro Tempore of the Senate shall appoint three members, each to serve an initial four-year term. A vacancy that occurs on the board must be filled by appointment by the Governor, the President Pro Tempore of the Senate, or the Speaker of the House of Representatives, as appropriate, for the remainder of the unexpired term.

(E)   A member shall not serve on the board if he is an officer or employee of the commission or if he has an immediate family member employed by the commission.

(F)   A member of the board may receive per diem, subsistence, and mileage at the rate provided by law for members of state boards, committees, and commissions.


Printed Page 3133 . . . . . Thursday, May 3, 2001

(G)   The board shall elect from their membership officers of the board, including the chair.

(H)   The board may delegate to the executive director of the commission those powers and duties it considers proper.

(I)   A majority of members in office or at least five members, whichever is greater, constitutes a quorum for the transaction of business and for the exercise of a power or function of the commission.

(J)   Action may be taken and motions and resolutions adopted by the board at a board meeting by affirmative vote of a majority of present and voting board members. This subsection does not relieve the board from the requirements of the South Carolina Freedom of Information Act.

(K)   A vacancy in the membership of the board does not impair the right of the members to exercise all the powers and perform all the duties of the board.

(L)   A member is appointed to the board for a term, but serves at the pleasure of the official who appointed him.

(M)   A member of the board shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

Section 59-150-50.   The board shall:

(1)   approve, disapprove, amend, or modify the budget recommended by the executive director for the operation of the commission;

(2)   approve, disapprove, amend, or modify the terms of procurements recommended by the executive director;

(3)   hear appeals of hearings required by this chapter;

(4)   promulgate regulations and adopt policies and procedures regulating the conduct of lottery games pursuant to the Administrative Procedures Act and as specified in Section 59-150-60(A)(19); and

(5)   perform other functions specified by this chapter.

Section 59-150-60.   (A)   The commission has all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter which are not in conflict with the Constitution and laws of this State and which generally are exercised by commissions engaged in entrepreneurial pursuits on behalf of the State including, but not limited to, the powers to:


Printed Page 3134 . . . . . Thursday, May 3, 2001

(1)   sue and be sued in contract and in tort and to complain and defend in all courts, subject to the South Carolina Tort Claims Act;

(2)   adopt and alter a corporate seal and symbol;

(3)   promulgate regulations and adopt policies and procedures for the regulation of its affairs and the conduct of its business; to elect and prescribe the duties of officers and employees of the commission; and to perform other matters as the commission may determine;

(4)   procure or to provide self-insurance;

(5)   hold copyrights, trademarks, and service marks and enforce its rights with respect to them;

(6)   organize, initiate, supervise, and administer the operation of the lottery as provided by this chapter and regulations promulgated and policies and procedures adopted pursuant to this chapter;

(7)   enter into written agreements with one or more other states for the operation, participation in marketing, and promotion of a joint lottery or joint lottery games, but such marketing and promotion is subject to the restrictions on advertising and promotion provided in item (17) of this section;

(8)   conduct necessary or appropriate market research, which may include an analysis of the demographic characteristics of the players of the lottery game and an analysis of advertising, promotion, public relations, incentives, and other aspects of communication;

(9)   acquire or lease real property and make improvements on it and acquire by lease or by purchase personal property including, but not limited to, computers; mechanical, electronic, and on-line equipment and terminals; and intangible property including, but not limited to, computer programs, systems, and software. To achieve cost savings and efficiency, the commission shall use the telecommunications network service of the Budget and Control Board's Office of Information Resources pursuant to Sections 1-11-430 and 11-35-1580 provided that the commission certifies that the service is secure;

(10)   administer oaths, take depositions, issue subpoenas, and compel the attendance of witnesses and the production of books, papers, documents, and other evidence relative to any investigation or proceeding conducted by the commission;

(11)   appoint, select, or hire officers, agents, and employees, including professional and administrative staff, personnel, and hearing officers to conduct hearings required by this chapter, and to fix their compensation and pay their expenses. Notwithstanding another provision of law, the commission has exclusive authority to contract


Printed Page 3135 . . . . . Thursday, May 3, 2001

for legal services. All employees of the commission are employees-at-will and are eligible for participation in the South Carolina Retirement System and may elect optional retirement program coverage in the same manner as provided in Section 9-20-10(2)(a), the State Health Insurance Group plans, and are encompassed by the South Carolina Tort Claims Act;

(12)   make pension payments to the South Carolina Retirement System or other system approved by the State Retirement System and pay contributions to the Office of Insurance Services for dental and health plans on behalf of personnel or employees employed by the commission who qualify in the same manner as other state employees in the executive branch of government;

(13)   select and contract with lottery vendors and lottery retailers;

(14)   enter into contracts or agreements with state or other law enforcement agencies for the performance of law enforcement, background investigations, and security checks;

(15)   enter into contracts on such terms and conditions as the commission may determine, except that the commission shall not enter into contracts to incur debt in its own name or enter into financing agreements with the State, agencies, or instrumentalities of the State, or with a commercial bank or credit provider; however, necessary start-up monies may be borrowed from the Insurance Reserve Fund of the Budget and Control Board, subject to the loan repayment terms of the Budget and Control Board, for effectuating its purpose, including payment of the initial expenses of initiation, administration, and operation of the commission and the lottery, if and only if sufficient start-up monies are not appropriated from the general fund;

(16)   enter into contracts of any type on the terms and conditions the commission determines, except that it may not enter into a contract with an entity for the purpose of having that entity assume or otherwise undertake the organization and conduct of the lottery;

(17)   advertise and promote the lottery and lottery games in a dignified manner befitting the State, but only in compliance with the same state and federal standards of truth in advertising which govern private advertisers engaged in interstate commerce and including the restrictions described in this item. The board shall review, at least quarterly, all past lottery advertising and proposed concepts for major media campaigns to ensure that the advertising did not and does not target with the intent to exploit specific ethnic groups or economic classes of people, and that the content is accurate and not misleading.


Printed Page 3136 . . . . . Thursday, May 3, 2001

The commission shall promote fair and responsible play, including disclosure of the odds of winning, and shall ensure that any advertising used does not exhort the public to bet by misrepresenting, directly or indirectly, a person's chance of winning a prize. The commission may use interviews, pictures, or statements from people who have won lottery prizes to show that prizes are won and awarded. If the board finds that advertising conflicts with these policies, the board shall cause the cessation of that advertising;

advertising and promotion of the lottery and lottery games as defined in Section 59-150-20(7) is restricted to: expenditure of not more than one-half of one percent of gross lottery revenues; contracts of one year or less and awarded by the board after competitive bidding; information about how the game is played; identification of amounts or recipients, or both of them, of funding from the proceeds of ticket sales; explanation of the permitted uses of lottery proceeds; probability of winning and losing; an entertainment context; encouragement of responsible play; information about recognizing and seeking treatment for compulsive gambling; sites and methods designed to reach the responsible adult player; and advertisements and promotions placed exclusively by the commission in newspapers or periodicals or on the commission official web site;

advertising and promotion of the lottery and lottery games must not include: inducements to play; targeting with the intent to exploit specific ethnic groups or economic classes of people; representations of the game as an investment or the answer to financial concerns; exaggeration of odds of winning; the name or image, or both, of an elected official, or the State Seal or its likeness; praise of a lottery player or denigration of a nonplayer; implication that the game is one of skill; suggestion that the lottery player is contributing money for the good of the State; any advertising outside of the lottery retailer's business premises; and advertising in connection with or at the site of a public school or institution of higher learning or sponsorship of an activity at a public school or institution of higher learning;

lottery advertising and promotion also: must include posting of warnings of the dangers and risks of gambling, and the odds of winning, on a three by two foot sign in a conspicuous location in all lottery retailer facilities; must otherwise encourage responsible decision making regarding lottery play by adults, discourage abusive use of the lottery product; and, other than as permitted in the provisions of this chapter for the commission and the lottery retailer, may not be undertaken by another entity or individual;


Printed Page 3137 . . . . . Thursday, May 3, 2001

notwithstanding any other provision of law, advertising relating to the lottery must not contain subliminal messages or images of any kind;

(18)   act as a lottery retailer, conduct promotions which involve the dispensing of lottery game tickets or shares, and establish and operate a sales facility to sell lottery game tickets or shares and related merchandise, except that the commission shall not establish, operate, or authorize a lottery sales facility at any state Welcome Center or state rest area; and

(19)   promulgate regulations and adopt and amend policies and procedures as necessary to carry out and implement its powers and duties, organize and operate the commission, regulate the conduct of lottery games as defined in Section 59-150-20(7), and other matters necessary or desirable for the efficient and effective operation of the lottery for the convenience of the public. The promulgation of the regulations and adoption of the policies and procedures are subject to the requirements of the Administrative Procedures Act.

(B)   The powers enumerated in subsection (A) are cumulative of and in addition to those powers enumerated elsewhere in this chapter, and do not limit or restrict other powers of the commission.

(C)   The commission is prohibited from distributing monies other than as prescribed by this chapter including, but not limited to, the prohibition of contributing to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); and the prohibition of making an independent expenditure to advance or defeat a measure related to the lottery.

(D)   The commission is not authorized to use any machine specifically prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   The commission is subject to the limitations upon, and exemptions from, liability and damages provided in the South Carolina Tort Claims Act.

(F)   The commission shall not issue, sell, or authorize the sale of lottery tickets or shares at a location licensed to provide deferred presentment services pursuant to Chapter 39 of Title 34.

(G)   The commission shall not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and the commission may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section


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2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the commission.

(H)   The commission may not sell or give away tickets for promotional purposes.

Section 59-150-70.   In accordance with the Administrative Procedures Act, the board may promulgate regulations and adopt policies and procedures regulating the conduct of lottery games in general; except the commission may promulgate temporary regulations and adopt policies and procedures to implement the provisions of this chapter which must be consistent with this chapter, except as otherwise provided in this section. The commission shall have tickets available for purchase by the public no later than November 1, 2001, or as soon as practicable. These temporary regulations, polices, and procedures are not considered regulations as defined by the Administrative Procedures Act; however, these temporary regulations, policies, and procedures have the force and effect of law. The temporary regulations must include all policies and procedures deemed by the commission to be necessary to fully implement the games included in Section 59-150-70. The only lottery games that may be played pursuant to these temporary regulations, policies, and procedures are instant tickets, dollar tickets, and dollar joint- or multi-state lottery games. The commission shall submit regulations to the General Assembly for review in accordance with the Administrative Procedures Act at the January 15, 2002, legislative session. The temporary regulations authorized in this section are repealed on July 15, 2004, or on the effective date of regulations promulgated pursuant to the Administrative Procedures Act, whichever date occurs first. If regulations promulgated pursuant to the Administrative Procedures Act have not taken effect by July 15, 2004, the commission may promulgate the temporary regulations authorized by this section as emergency regulations pursuant to Section 1-23-130. For purposes of this section, the circumstances required for emergency regulations in Section 1-23-130(A) do not apply, but all other provisions of Section 1-23-130 are applicable. The regulations, policies, and procedures must specify, but are not limited to specifying, the:

(1)   type of lottery games as described in Section 59-150-20(7). The lottery games may include the selling of lottery game tickets or shares or the use of electronic or mechanical devices, except those electronic or mechanical devices prohibited by Section 59-150-20(7), and except that the game or activity in which the winner is selected


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must not be based upon the outcome of a football, basketball, baseball, or similar game or sports event;

(2)   sale price of lottery game tickets or shares and the manner of sale, except that all sales must be for cash only. Payment by checks, credit cards, charge cards, or other form of deferred payment and payment by debit card are prohibited;

(3)   number and amount of prizes;

(4)   method and location of selecting or validating winning lottery game tickets or shares;

(5)   manner and time of payment of prizes, which may include lump sum payments or installments over a period of years, except that the State is not liable for the nonpayment of a prize;

(6)   manner of payment of prizes by a lottery retailer to the holders of a winning lottery game ticket or share including, without limitation, provision for payment of prizes not exceeding six hundred dollars after deducting the price of the lottery game ticket or share and after performing validation procedures appropriate to the game and as specified by the board;

(7)   frequency of lottery games and drawings or selection of winning lottery game tickets or shares;

(8)   means of conducting drawings, except that an elected or appointed official, other than the members of the board or its designee, must not preside or appear at a drawing, and except that the drawing may be aired publicly only by means of a public service announcement and carried by any news outlet that makes public service time available for that purpose;

(9)   method to be used in selling lottery game tickets or shares, which may include the use of electronic or mechanical devices, but the devices must be placed on the premises of the lottery retailer in a location which is only accessible to the lottery retailer or his employees;

(10)   manner and amount of compensation to a lottery retailer within the limits of this chapter;

(11)   other matters necessary or desirable toward ensuring the efficient and effective operation of lottery games as defined in Section 59-150-20(7), the continued entertainment and convenience of the public, and the integrity of the lottery.

Section 59-150-80.   (A)   The board shall appoint and provide for the compensation of an executive director which must not be based upon or a function of profitability or percentage of sales. The executive director must be an employee of the commission who directs


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the day-to-day operations and management of the commission and is vested with powers and duties specified by the board and by law. The executive director serves at the pleasure of the board.

(B)   The board shall hire and provide for the compensation of an internal auditor and necessary staff who must be employees of the commission and who are vested with the powers and duties specified by the board and by law. The internal auditor shall report directly to the board.

Section 59-150-90.   (A)   The executive director of the commission shall direct and supervise all administrative and technical activities as provided for in this chapter, according to the terms and conditions as may be established by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years and with the regulations promulgated and policies and procedures adopted by the board. It is the duty of the executive director to facilitate the initiation and supervise and administer the operation of the lottery games as defined in Section 59-150-20(7); employ and direct necessary personnel; employ by contract and compensate necessary persons and firms, except that the contract may not be with an entity for the purpose of having that entity undertake the organization and conduct of the lottery; promote or provide for promotion of the lottery and functions related to the commission; prepare a budget for the approval of the board; require bond from a lottery retailer and a lottery vendor in amounts required by the board; report monthly to the State Auditor and the board a full and complete statement of lottery revenues and expenses for the preceding month; and perform other duties generally associated with an executive director of a commission of an entrepreneurial nature.

(B)   The executive director for good cause may suspend, revoke, or refuse to renew a contract entered into as provided by the provisions of this chapter or the regulations, policies, and procedures of the board.

(C)   The executive director or his designee may conduct hearings and administer oaths to persons for the purpose of assuring the security or integrity of lottery operations or to determine the qualifications of or compliance by a lottery vendor and a lottery retailer.

(D)   The executive director shall not contribute to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.


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Section 59-150-100.   (A)   The commission shall establish and maintain a personnel program for its employees and fix the compensation and terms of compensation of its employees.

(B)   An employee of the commission or an immediate family member of an employee of the commission, as defined in Section 59-150-20(6), may not have a financial interest in a lottery vendor doing business or proposing to do business with the commission and is otherwise subject to the South Carolina Ethics Reform Act.

(C)   An employee of the commission who has decision-making authority shall not participate in a decision involving a lottery retailer with whom the employee has an economic interest as defined in the South Carolina Ethics Reform Act.

(D)   Notwithstanding any other provision of law, an employee of the commission who leaves his employment may not represent a lottery vendor or lottery retailer before the commission for a period of two years following termination of employment with the commission.

(E)   A background investigation must be conducted on each applicant who has reached the final selection process before employment by the commission at the level of division director and above and at any level within any division of security and as otherwise required by the board. The commission shall pay for the actual cost of the investigations and may contract with SLED for the performance of the investigations. The results of a background investigation are not a record open to the public pursuant to the Freedom of Information Act.

(F)   A person who has been convicted of a felony or bookmaking or other forms of illegal gambling or of a crime involving moral turpitude may not be employed by the commission.

(G)   The commission shall bond commission employees who have access to commission funds or lottery revenue in an amount provided by the board and may bond other employees as necessary.

Section 59-150-110.   (A)   The Governor shall appoint a Lottery Retailer Advisory Board to be composed of ten lottery retailers, representing the broadest possible spectrum of geographical, racial, gender, and business characteristics of a lottery retailer. The Governor also shall appoint the chairman of the advisory board. The function of the advisory board is to advise the lottery board on retail aspects of the lottery and to present the concerns of a lottery retailer throughout the State. The advisory board may establish a consumer representatives committee to help provide additional insight on other aspects of lottery retail sales.


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(B)   Members appointed to the advisory board serve terms of two years, except that four of the initial lottery retailer appointees serve initial terms of one year and five serve initial terms of two years. The chairman of the advisory board serves co-terminus with the Governor.

(C)   The advisory board shall establish its own rules and internal operating procedures. Members of the advisory board serve without compensation or the per diem, subsistence, or mileage provided by law for members of state boards, committees, and commissions. The advisory board may report to the board of commissioners in writing at any time. The board of commissioners may invite the advisory board to make an oral presentation to the commissioners at regular meetings of the board.

Section 59-150-120.   The commission shall provide training programs and other educational activities to enable small and minority businesses to compete for contracts on an equal basis. The board shall monitor the results of small and minority business participation and shall report the results of small and minority business participation to the State Human Affairs Commission on at least an annual basis pursuant to Section 1-13-110.

Section 59-150-130.   (A)   In coordination with SLED, the commission shall investigate the financial responsibility, security, and integrity of a lottery vendor who is a finalist in submitting a bid, proposal, or offer as part of a procurement. To defray a portion of the expense of this investigation, each lottery vendor finalist shall submit a certified check for five thousand dollars to the commission. This sum must be placed in an escrow account from which SLED must be paid to conduct the investigation pursuant to this section. If five thousand dollars is not sufficient to complete the investigation, the commission shall require the lottery vendor finalist to remit additional funds. Any funds remaining in the escrow account after the investigation is complete must be returned to the lottery vendor finalist. At the time of submitting the bid, proposal, or offer to the commission, the commission shall require disclosure of the:

(1)   lottery vendor's name and address and, as applicable, the names and addresses of the following, if the lottery vendor is:

(a)   a corporation, the officers and directors and each stockholder in the corporation, except that in the case of owners of equity securities of a publicly-traded corporation, the names and addresses of only those known to the corporation to own beneficially five percent or more of the securities must be disclosed;


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(b)   a trust, the trustee and all persons entitled to receive income or benefits from the trust;

(c)   an association, the members, officers, and directors; and

(d)   a partnership or joint venture, all of the general partners, limited partners, or joint venturers;

(2)   states and jurisdictions in which the lottery vendor does business and the nature of the business for each such state or jurisdiction;

(3)   states and jurisdictions in which the lottery vendor has contracts to supply gaming goods or services including, but not limited to, lottery goods and services, and the nature of the goods or services involved for each state or jurisdiction;

(4)   states and jurisdictions in which the lottery vendor has applied for, sought renewal of, received, been denied, or had revoked, or has issuance pending of, a lottery or gaming license of any kind or had fines or penalties assessed to his license, contract, or operation and the disposition of each in each state or jurisdiction. If a lottery or gaming license or contract has been revoked or has not been renewed or a lottery or gaming license or application has been denied or is pending and has remained pending for more than six months, all of the facts and circumstances underlying the failure to receive a license must be disclosed;

(5)   details of a finding or any plea, conviction, or adjudication of guilt in a state or federal court of the lottery vendor for a felony or other criminal offense other than a traffic violation. A fingerprint exemplar may be required to satisfy this item;

(6)   details of any bankruptcy, insolvency, reorganization, or corporate or individual purchase or takeover of another corporation, including bonded indebtedness, or pending litigation of the lottery vendor;

(7)   contributions made to the campaign of a candidate for the General Assembly or statewide constitutional office, to any political party, as defined in Section 8-13-1300(26), or to a committee, as defined in Section 8-13-1300(6), or independent expenditures made to advance or defeat a measure related to the lottery for the twelve-month period before the application and up to the date of disqualification of the applicant or the awarding of the contract, whichever occurs first; and

(8)   additional information the commission determines appropriate for the procurement involved.   If at least twenty percent of the cost of a lottery vendor's contract is subcontracted, the lottery


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vendor shall disclose all of the information required by this section for the subcontractor as if the subcontractor were itself a lottery vendor.

(B)   A lottery procurement contract must not be entered into with a lottery vendor who has not complied with the disclosure requirements described in subsection (A), and a contract with a noncomplying lottery vendor is voidable at the option of the commission. The commission may terminate a contract with a lottery vendor who does not comply with the requirements for periodically updating the disclosures during the time specified in the contract. The provisions of this section must be construed broadly and liberally to achieve the ends of full disclosure of all information necessary to allow for a full and complete evaluation by the commission of the competence, integrity, background, and character of a lottery vendor for procurements.

(C)   A procurement contract must not be entered into with a lottery vendor if he or it has:

(1)   been convicted of a criminal offense related to the security or integrity of the lottery in this or another jurisdiction;

(2)   been convicted of unlawful gambling activity, false statements, false swearing, or perjury in this or another jurisdiction or convicted of a crime punishable by more than one year of imprisonment or a fine of more than one thousand dollars, or both, unless the person's civil rights have been restored and at least five years have elapsed from the date of the completion of the sentence without a subsequent conviction of a crime described in this subitem; or

(3)   been found to have violated the provisions of this chapter or a regulation, policy, or procedure of the commission, unless either ten years have passed since the violation or the board finds the violation both minor and unintentional in nature.

(D)   A procurement contract must not be entered into with a lottery vendor if the lottery vendor has an ownership interest in an entity that supplied consultation services under contract to the commission regarding the request for proposals pertaining to those particular goods or services.

(E)   A lottery vendor or applicant for a major procurement contract may not pay, give, or otherwise make available an economic opportunity, gift, loan, gratuity, special discount, favor, hospitality, or service, excluding food and beverages having an aggregate value not exceeding twenty-five dollars in one day or two hundred dollars in a calendar year, or any other thing of value, to the executive director, a board member, or an employee of the commission or to a member of


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his immediate family residing in the same household. For purposes of this subsection all terms are used as defined in Section 8-13-100.

(F)   A lottery vendor who has entered into the competitive solicitation process for a procurement contract or has been awarded a procurement contract with the commission shall not contribute, for a period of twelve months before entering into the procurement process, except that during the first twelve months the period must be from the date of enactment, and during the term of the contract, to the campaign of a candidate for the General Assembly or a statewide constitutional office; to a political party, as defined in Section 8-13-1300(26); or to a committee, as defined in Section 8-13-1300(6); or make an independent expenditure to advance or defeat a measure related to the lottery.

(G)   A former public official holding public office, a former public member holding public membership, or a former public employee having public employment on or after the effective date of this chapter may not serve a lottery vendor for a period of two years after terminating his public service or employment.

(H)   A lottery vendor may not enter into a contract for the purpose of influencing a political decision in connection with the operation of the lottery, and a lottery vendor may not employ, contract with, or otherwise authorize a lobbyist, as defined in Section 2-17-10(13), to engage in lobbying, as defined in Section 2-17-10(12), on behalf of the lottery vendor.

(I)   A lottery vendor may not advertise or promote the lottery or its business relationship with the commission.

(J)   A lottery vendor that is a contractor with the State or any agency, commission, or department of the State shall disclose, upon written inquiry, the amount of any commission, referral fee, finder's fee, consulting fee, contingency fee, or other monies paid in connection with obtaining the contract and the name of the person to whom the monies were paid.

(K)   The prohibitions and restrictions described in item (A)(7) and subsections (F) and (H) specifically apply to a lottery vendor as defined in Section 59-150-20(9) and its employees, members of its board, and holders of an interest in it of more than ten percent, and their immediate family members, as defined in Section 59-150-20(6).

(L)   The commission is prohibited from contracting with a lottery vendor if the fee or commission payable in connection with the service or product is contingent, in whole or in part, upon performance of lottery sales or other lottery profitability measure.


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Section 59-150-140.   (A)   At the execution of the contract with the commission, a lottery vendor shall post a performance bond or letter of credit from a bank or credit provider acceptable to the commission in an amount determined by the commission for that particular bid or contract. Instead of the bond, a lottery vendor, to assure the faithful performance of its obligations, may deposit and maintain with the commission securities that are interest bearing or accruing and that are rated in one of the three highest classifications by an established nationally recognized investment rating service. Securities eligible pursuant to this section are limited to:

(1)   certificates of deposit issued by solvent banks or savings associations which are organized and existing under the laws of this State or under the laws of the United States and are approved by the commission;

(2)   United States bonds, notes, and bills for which the full faith and credit of the government of the United States is pledged for the payment of principal and interest; and

(3)   corporate bonds approved by the commission. The corporation that issued the bonds must not be an affiliate or subsidiary of the depositor. The securities must be held in trust and must have at all times a market value equal at least to the full amount estimated to be paid annually to the lottery vendor under contract.

(B)   Each lottery vendor must be qualified to do business in this State and shall file appropriate tax returns as provided by the laws of this State. All contracts pursuant to this section are governed by the laws of this State.

(C)   A contract may not be let with a lottery vendor in which a public official has an ownership interest unless the letting of the contract complies with Section 8-13-775.

(D)   Procurement contracts must be handled in accordance with the South Carolina Consolidated Procurement Code.

(E)   In all contracts entered into in connection with this chapter, the resident lottery vendor preference provided in Section 11-35-1524 must apply to procurements made by the commission, except that the following additional provisions apply:

(1)   the preference also must apply to the procurement of services, as defined in Section 11-35-310(29), and advertising;

(2)   with respect to the procurement of services or advertising, the definition of the term 'resident lottery vendor' must be modified as provided in this item. Section 11-35-1524(B)(6)(c) does not apply to a lottery vendor providing services or advertising. Instead of Section


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11-35-1524(B)(6)(c), the lottery vendor shall provide services or advertising which are representative of the general type of services or advertising on which the bid is submitted;

(3)   with respect to the procurement of services or advertising, instead of providing the certifications provided in Section 11-35-1524(C), the lottery vendor shall certify in writing in the bid:

(a)   that he is resident of the State;

(b)   the services or advertising is available; and

(c)   the cost of the services or advertising is not unreasonable.

Section 59-150-150.   (A)   The commission shall develop and maintain a statewide network of lottery retailers to serve the public convenience and promote the sale of tickets or shares and the playing of lottery games as defined in Section 59-150-20(7) while ensuring the integrity of the lottery operations, games, and activities. A lottery retailer's sales of lottery tickets or shares may not exceed sixty percent annually of its total business as measured by gross revenues. The Department of Revenue shall provide data concerning a lottery retailer's gross revenues to assist the commission in verifying compliance with this provision. The commission also shall provide a small retailer a chance to participate in the sales of lottery tickets or shares; provide for compensation to a lottery retailer in the form of commissions in an amount of not more than seven percent of gross sales and not more than a one percent incentive for cashing winning tickets for prizes less than six hundred dollars; and issue a license to each person with whom it contracts as a lottery retailer for purposes of display. Each lottery retailer shall post and display conspicuously its license on the disclosure sign required by Section 59-150-60(A)(17). A license is not assignable or transferable.

(B)   The board shall develop a list of objective criteria upon which the qualification of a lottery retailer must be based. Separate criteria must be developed to govern the selection of a lottery retailer of instant tickets and an on-line lottery retailer. In developing these criteria, the board shall consider factors such as the applicant's financial responsibility, integrity, and reputation, and the security of the applicant's place of business or activity, and accessibility to the public. The board shall not consider political affiliation or activities or monetary contributions to political organizations or candidates for public office. The criteria must include, but is not limited to, the following:


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(1)   The applicant must be current in filing all applicable tax returns to the State of South Carolina and in payment of all taxes, interest, and penalties owed to the State of South Carolina, excluding items under formal appeal pursuant to applicable statutes. The Department of Revenue shall provide this information to the commission.

(2)   A person, partnership, unincorporated association, corporation, or other business entity must not be selected as a lottery retailer if he or it:

(a)   has been convicted of a criminal offense related to the security or integrity of the lottery in this or another jurisdiction;

(b)   has been convicted of unlawful gambling activity, false statements, false swearing, or perjury in this or another jurisdiction or convicted of a crime punishable by more than one year of imprisonment or a fine of more than one thousand dollars, or both, unless the person's civil rights have been restored and at least five years have elapsed from the date of the completion of the sentence without a subsequent conviction of a crime described in this subitem;

(c)   has been found to have violated the provisions of this chapter or a regulation, policy, or procedure of the commission, unless either ten years have passed since the violation or the board finds the violation both minor and unintentional in nature;

(d)   is a lottery vendor or an employee or agent of a lottery vendor doing business with the commission;

(e)   resides in the same household as an officer of the commission;

(f)   has made a statement of material fact to the commission knowing the statement is false;

(g)   has a business of selling lottery tickets or shares that accounts for more than sixty percent annually of its gross revenues, except that the commission may not sell or give away lottery tickets or shares as a lottery retailer, as provided in Section 59-150-210;

(h)   has not attained the age of twenty-one years, except that this age restriction applies only to the lottery retailer or lottery retailer applicant and not to a bona fide employee of the lottery retailer; and

(i)     has its place of business located within three hundred feet of a church, school, or playground situated within a municipality or within five hundred feet of a church, school, or playground situated outside of a municipality. These distances must be measured in a straight line, without regard to intervening structures or objects, from the nearest property line of the lot on which a building or structure is


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used as a lottery retailer to the nearest property line of the location of the church, school, or playground, which are defined as follows:

(i)     'church' means an establishment, other than a private dwelling, where religious services are usually conducted;

(ii)   'school' means an establishment, other than a private dwelling, where the usual processes of education are usually conducted; and

(iii)   'playground' means a place, other than grounds at a private dwelling, which is provided by the public or members of a community for recreation.

The restrictions in subitem (i) do not apply to the renewal of a license or to a new application for a location that is licensed at the time the new application is filed with the commission.

(3)   A person applying to become a lottery retailer must be charged a uniform application fee for each lottery outlet. A lottery retailer who participates in on-line lottery games must be charged a uniform application fee for each on-line outlet.

(4)   A lottery retailer contract executed pursuant to this chapter may be suspended, revoked, or terminated for good cause by the executive director or his designee if the lottery retailer is found to have violated a provision of this chapter or the regulations, policies, and procedures established by the board. Review of activities is subject to the Administrative Procedures Act.

(5)   Lottery retailer contracts may be renewable annually at the discretion of the commission, unless sooner canceled or terminated.

(6)   A lottery retailer or lottery retailer applicant shall not pay, give, or otherwise make available anything of value to a member of the board of directors of the commission in violation of provisions of the South Carolina Ethics Reform Act.

(7) A lottery retailer who enters into a contract with the commission shall file an initial certified report with the State Ethics Commission showing all contributions or donations made to a committee, as defined in Section 8-13-1300(6). The lottery retailer shall file additional certified reports within ten days following the end of each calendar quarter and for the duration of the contract with the commission.

Section 59-150-160.   (A)   A lottery retailer contract is not transferable or assignable. A lottery retailer shall not contract with a person for lottery goods or services except with the approval of the board.


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(B)   Lottery game tickets and shares must be sold only by the lottery retailer named on the lottery retailer certificate.

(C)   A lottery retailer may not advertise or promote the lottery outside of the lottery retailer's business premises, and is restricted to the advertising and promotion as permitted in Section 59-150-60(A)(17).

Section 59-150-170.   (A)   The commission shall establish a fidelity fund separate from all other funds and shall assess each lottery retailer a one-time fee not to exceed one hundred dollars for each sales location. Monies deposited into the fund may be used to cover losses the commission may experience due to nonfeasance, misfeasance, or malfeasance of a lottery retailer. The monies may be invested by the commission pursuant to state investment practices. All earnings attributable to the investments accrue to the fund. In addition, the funds may be used to purchase blanket bonds covering the commission against losses from all a lottery retailer. At the end of each fiscal year, the commission shall pay to the Education Lottery Account any amount in the fidelity fund which exceeds five hundred thousand dollars, and the funds paid must be treated as net proceeds from the lottery.

(B)   A reserve account may be established as a general operating expense to cover amounts considered uncollectible from the a lottery retailer. The commission shall establish procedures for minimizing losses that may be experienced by reason of nonfeasance, misfeasance, or malfeasance of a lottery retailer, and shall exercise and exhaust all available options in the procedures before amounts are written off to this account.

(C)   The commission may require a lottery retailer to post an appropriate bond, as determined by the commission, using an insurance company acceptable to the commission. The amount must not exceed the applicable district sales average of lottery game tickets for two billing periods.

(D)(1)   In its discretion, the commission may allow a lottery retailer to deposit and maintain with the commission securities that are interest bearing or accruing. Securities eligible pursuant to this item are limited to:

(a)   certificates of deposit issued by solvent banks or savings associations organized and existing under the laws of this State or under the laws of the United States;

(b)   United States bonds, notes, and bills for which the full faith and credit of the United States is pledged for the payment of principal and interest; and


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(c)   federal agency securities by an agency or instrumentality of the United States government.

(2)   The securities must be held in trust in the name of the commission.

Section 59-150-180.   (A)   A retail contract executed by the commission pursuant to this chapter must specify the reasons for which the contract may be canceled, suspended, revoked, or terminated by the commission including, but not be limited to:

(1)   a violation of this chapter, a regulation, or a policy or procedure of the commission;

(2)   failure to account accurately or timely for lottery game tickets, lottery games, revenues, or prizes as required by the commission;

(3)   fraud, deceit, or misrepresentation;

(4)   insufficient sales;

(5)   conduct prejudicial to public confidence in the lottery;

(6)   filing for or placement in bankruptcy or receivership of the lottery retailer;

(7)   a material change, as determined in the sole discretion of the commission, in a matter considered material by the commission in executing the contract with the lottery retailer; or

(8)   failure to meet any of the objective criteria established by the commission pursuant to this chapter.

(B)   If cancellation, denial, revocation, suspension, or rejection of renewal of a lottery retailer contract is in the best interest of the lottery, the public welfare, or the State of South Carolina, the executive director or his designee, in his discretion, may cancel, suspend, revoke, or terminate, after notice and a right to a hearing, a contract issued pursuant to this chapter. A hearing must be held within sixty days of notice of cancellation, suspension, revocation, or termination and conducted by the executive director or his designee. A party to the contract aggrieved by the decision of the executive director or his designee may appeal the adverse decision to the board, and then to the Administrative Law Judge Division, pursuant to the Administrative Procedures Act.

Section 59-150-190.   (A)   All proceeds from the sale of the lottery game tickets or shares constitute a trust fund until paid to the commission either directly or through the commission's authorized collection representative. A lottery retailer and officers of a lottery retailer's business have a fiduciary duty to preserve and account for lottery proceeds, and a lottery retailer personally is liable for all


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proceeds. Proceeds include unsold instant tickets received by a lottery retailer and cash proceeds of the sale of lottery products, net of allowable sales commissions and credit for lottery prizes sold or paid to winners by a lottery retailer. Sales proceeds and unused instant tickets must be delivered to the commission or its authorized collection representative upon demand.

(B)   The commission shall require a lottery retailer to place all lottery proceeds due the commission in accounts in institutions insured by the Federal Deposit Insurance Corporation (FDIC) no later than the close of the next banking day after the date of their collection by the lottery retailer until the date they are paid over to the commission. At the time of the deposit, lottery proceeds are considered the property of the commission, and a lottery retailer personally is liable for those proceeds due the commission. The commission may require a lottery retailer to establish a single separate electronic funds transfer account where available for the purpose of receiving monies from ticket or share sales, making payments to the commission, and receiving payments for the commission. Unless otherwise authorized in writing by the commission, each lottery retailer shall establish a separate bank account for lottery proceeds which must be kept separate and apart from all other funds and assets, and must not be commingled with any other funds or assets. A lottery retailer, upon the deposit of lottery proceeds in excess of insurance coverage by the FDIC, shall furnish an indemnity bond from a responsible surety company authorized to do business in this State in an amount sufficient to protect the State against loss in the event of insolvency or liquidation of the institution or for another cause. A lottery retailer, instead of the indemnity bond, may pledge as collateral for the deposits, obligations of the United States, obligations fully guaranteed both as to principal and interest by the United States, obligations of the Federal National Mortgage Association, the Federal Home Loan Bank, Federal Farm Credit Bank, the Federal Home Loan Mortgage Corporation, or general obligations of this State or a political subdivision of it. The State Treasurer shall exercise prudence in accepting the securities listed as collateral. The surety or collateral must be filed with the State Treasurer at time of deposit.

(C)   Proceeds from the sale of lottery game tickets or shares received by a lottery retailer who becomes insolvent or dies insolvent, are due the commission from the person or his estate in preference over all debts or demands.


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(D)   A lottery retailer is not required to pay for lottery tickets or shares until the tickets or shares have been activated by the commission.

Section 59-150-200.   If a lottery retailer's rental payments for the business premises are contractually computed, in whole or in part, on the basis of a percentage of retail sales and the computation of retail sales is not defined explicitly to include sales of lottery game tickets or shares in a state operated or state managed lottery, only the compensation received by the lottery retailer from the commission may be considered the amount of the lottery retail sale for purposes of computing the rental payment.

Section 59-150-210.   (A)   A person shall not sell a lottery game ticket or share at a price other than that established by the commission. A person, other than a duly certified lottery retailer, shall not sell lottery game tickets, but a person may purchase lawfully lottery game tickets or shares and make a gift of the lottery game tickets or shares to another. The commission may designate certain agents and employees to sell lottery game tickets or shares directly to the public.

(B)   A lottery retailer shall not sell a lottery game ticket or share except from the locations listed in the lottery retailer's contract and as evidenced by the lottery retailer's certificate of authorization unless the commission authorizes, in writing, a temporary location not listed in the lottery retailer's contract.

(C)   Lottery game tickets or shares must not be sold to persons under eighteen years of age, but a person eighteen years of age or older may purchase lawfully lottery game tickets or shares and make a gift to a person of any age. If a minor lawfully receives a winning lottery game ticket, the commission may direct payment of proceeds of a lottery prize in an amount not exceeding two thousand five hundred dollars to the parent or guardian of the minor without court approval and without appointment of a conservator. In the case of a lottery prize greater than two thousand five hundred dollars and not exceeding twenty-five thousand dollars, payment must be made in accordance with the procedures outlined in Section 62-5-103 as they relate to distribution. In the case of a prize in an amount greater than twenty-five thousand dollars, payment must be made to a duly appointed conservator to be held for the benefit of the minor, pursuant to Section 62-5-433.

(D)   A lottery ticket or share may not be sold on the date of any general elections or on any Sunday; within three hundred feet of a church, school, or playground, as provided in Section


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59-150-150(B)(2)(i); to a lottery game other than that defined in Section 59-150-20(7); or to a lottery game with corporate sponsorship. A lottery ticket or share may not be sold at a location that serves alcohol for on-premise consumption.

(E)   a lottery ticket or share may not be sold on the campus of a public institution of higher learning as defined in Section 59-103-5.

Section 59-150-220.   (A)(1)   Upon the theft of instant tickets, a lottery retailer shall report immediately the theft to both the local law enforcement authority and to the commission's division of security.

(2)   If tickets are stolen before the book is activated, and no tickets within the book have been sold:

(a)   the lottery retailer must be charged a nonrefundable service fee for each incident in an amount determined by the commission to cover its costs only, so long as the name of the local law enforcement agency contacted and the assigned case number are furnished promptly to the commission;

(b)   if the name of the local law enforcement agency and the assigned case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, the commission shall charge the lottery retailer in accordance with subsection (3)(b).

(3)   If tickets are stolen after the book has been activated or tickets within the book have been sold:

(a)   a lottery retailer must be charged the net sales value (retail sales value less commission) for each book, less the low tier prize values of stolen tickets not paid at the time of the incident, so long as the lottery retailer furnished the name of the local law enforcement agency and the assigned case number to the commission;

(b)   if the name of a law enforcement agency and case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, credit for the unpaid low tier prizes must not be given and the lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4)   The commission shall adjust charges described in item (3) for the following reasons:

(a)   the commission shall charge a lottery retailer the low tier prize value of tickets that are presented to the commission as claims subsequent to the date of the incident. The commission shall determine which prizes must be subsequently paid based upon the facts of the incident, and that amount must be charged to the lottery retailer;


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(b)   the commission shall provide credit for recovered stolen tickets as follows:

(i)     the net sales value of the tickets recovered must be compared to the total value of the uncashed low tier prizes for each book of tickets. The lottery retailer shall receive credit for the greater of these two values;

(ii)   recovered tickets must be returned to the commission by the declared end of game redemption deadline or one hundred eighty days from the date of the incident, whichever is later. The game, book, and ticket number must be legible on each ticket for the lottery retailer to receive credit. If tickets are being held as evidence in a criminal investigation by a law enforcement agency, the commission shall accept a property report from that agency by the declared end of the game redemption deadline or one hundred eighty days from the date of the incident, whichever is later, detailing the game, book, and ticket number or Void If Removed Number (VIRN) for the tickets being held, as documentation to provide credit;

(iii)   recovered scratched tickets may be accepted for credit only if that condition of the tickets is identified in documentation provided to the commission by the local law enforcement agency;

(iv)   the lottery retailer shall receive no credit for recovered tickets that have been validated;

(v)   the commission shall determine the credits provided based upon the facts of the incident, and that amount must be credited to the lottery retailer.

(5)   Books reported to the commission as stolen must be marked in the commission's records to prevent validation and payment of prizes within the book.

(B)(1)   Upon the loss or damage of instant tickets, a lottery retailer immediately shall report the loss or damage to the both the local law enforcement authority and to the commission's division of security.

(2)   If tickets are damaged before the book is activated, no tickets within the book are sold, and all tickets in the book are returned to the commission, a lottery retailer may not be charged a service fee. If tickets are lost before the book is activated and no tickets within the book have been sold, a lottery retailer must be charged a nonrefundable service fee of twenty-five dollars for each incident for up to four books and five dollars for each book over four books.

(3)   If tickets are lost or damaged after the book is activated or if tickets within the book are sold, a lottery retailer must be charged the net sales value (retail sales value less commission) for each book.


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(4)   Upon the written approval by the commission, the commission shall provide credit for recovered lost or damaged tickets for the net sales value of the tickets recovered.

(a)   To receive approval, the lottery retailer shall provide the facts of the incident in writing to the commission for consideration.

(b)   The written request and recovered tickets must be returned to the commission by the redemption deadline and the game, book, and ticket number must be legible on each ticket in order for the lottery retailer to receive credit.

(c)   Scratched tickets must not be accepted for credit. A scratched ticket is one that in the commission's judgment has been compromised as to the security and integrity of the ticket due to removal of latex.

(d)   Tickets identified as validated before the recovery result in no credit to the lottery retailer.

(5)   Books reported to the commission as lost or damaged must be marked as such in the commission's records to prevent validation and payment of prizes within the book.

(6)   In the event of acts of God, occurrences of nature, or other natural disasters, the commission may waive the requirements of this subsection.

Section 59-150-230.   (A)   Lottery prizes are subject to the South Carolina state income tax. Residents and nonresidents of this State who receive a lottery prize in excess of five hundred dollars are subject to a mandatory withholding of state income tax as required by law. Federal income tax must be withheld from lottery prizes in excess of five thousand dollars. Neither the State nor a county, municipality, or other political subdivision of this State may impose a tax on the sale of a lottery ticket or share or on the payment of a prize pursuant to this chapter; nor may a county, municipality, or other political or public subdivision assess an ad valorem tax against a lottery ticket or share bought or sold pursuant to this chapter.

(B)   Except as otherwise provided in this chapter, attachments, garnishments, or executions authorized and issued pursuant to law must be withheld if timely served upon the commission. This subsection does not apply to a lottery retailer.

(C)   The commission shall promulgate regulations and adopt policies and procedures to establish a system of verifying the validity of lottery games tickets or shares claimed to win prizes and to effect payment of prizes.


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(1)   A prize, a portion of a prize, or a right of a person to a prize awarded is not assignable except as provided in this section. A prize or a portion of a prize remaining unpaid at the death of a prize winner must be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the commission with a notarized letter of direction from the settlor and no written notice of revocation has been received by the commission before the settlor's death. Following a settlor's death and before payment to a trustee, the commission shall obtain from the trustee a written agreement to indemnify and hold the commission harmless with respect to claims that may be asserted against the commission arising from payment to or through the trust. Notwithstanding any other provisions of this section, a person, pursuant to an appropriate judicial order, may be paid the prize to which a winner is entitled.

(2)   (a)   If the winner of a lottery game prize elects to receive his prize by way of deferred payments, the commission must deposit, in the same quarter as the prize was won and in a restricted account, the total amount of the prize. The deferred payments to the winner of the lottery game prize must be paid out only from that restricted account.

(b)   The restricted account provided in subitem (a) must be known as the 'Deferred Lottery Prize Payment Account'. The monies in the restricted account may be used only for the purpose of making deferred payments of a lottery game prize as elected by a prize winner. The monies in the Deferred Lottery Prize Payment Account may not be used to determine the assets of the commission, except to manifest them as encumbered.

(c)   The State Treasurer may invest the monies deposited in the Deferred Lottery Prize Payment Account as provided by law.

(3)   A prize must not be paid if it:

(a)   arises from claimed lottery game tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;

(b)   lacks captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or

(c)   fails to comply with additional specific regulations and public or confidential validation and security tests of the commission appropriate to the particular lottery game involved.

(4)   A particular prize in a lottery game must not be paid more than once, and if more than one person is entitled to a particular prize,


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the sole remedy of those persons is the award to each of them of an equal share in the prize.

(5)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days, or for a multi-state lottery game within one hundred eighty days, after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter.

(D)   A prize must not be paid upon a lottery game ticket or share purchased or sold in violation of this chapter and is an unclaimed prize for purposes of this section.

(E)   The commission is discharged of all liability upon payment of a prize.

(F)   A lottery game ticket or share must not be purchased by and a prize must not be paid to a member of the board, an officer or employee of the commission, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence. A lottery game ticket or share must not be purchased by and a prize must not be paid to an officer, employee, agent, or a subcontractor of a lottery vendor, or a spouse, child, brother, sister, or parent residing as a member of the same household in his principal place of residence if he has access to confidential information that may compromise the integrity of the lottery.

(G)   A lottery prize may not be paid to a person who is incarcerated or on probation or parole. A lottery prize payment received in violation of this subsection must be returned immediately and in full to the commission.

(H)   The use of an electronic or mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and their employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense as a prize coins or currency. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40 and 16-19-50.

(I)   Unclaimed prize money must be deposited in the Education Lottery Account each year. A portion of the unclaimed prize money, in an amount to be determined by the General Assembly in its annual general appropriations bill and other bills appropriating monies for


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previous or current fiscal years, must be allocated to the Department of Education for the purchase of new school buses. A portion, in an amount to be determined by the General Assembly, of the unclaimed prize money in the Education Lottery Account, must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the South Carolina Department of Alcohol and Other Drug Abuse Services for the treatment of compulsive gambling disorder and educational programs related to that disorder, including a gambling hotline. The Director of the DAODAS shall report to the board on the programs implemented with these funds, and provide a copy of the report to the General Assembly.

Section 59-150-240.   (A)   The commission is subject to the provisions of Chapter 4, Title 30 the South Carolina Freedom of Information Act.

(B)   The commission shall perform full criminal background investigations before the execution of a lottery vendor contract.

(C)   The commission or its authorized agent shall:

(1)   conduct criminal background investigations and credit investigations on all potential a lottery retailer and employees;

(2)   supervise lottery game ticket or share validation and lottery drawings;

(3)   inspect, at times determined solely by the commission, the facilities or operations of a lottery vendor or lottery retailer to determine the integrity of the lottery vendor's product or compliance by the lottery retailer or lottery vendor with its contract;

(4)   report suspected violations of this chapter to the appropriate investigative and prosecutorial agency having jurisdiction over the violation; and

(5)   upon request, provide assistance to a solicitor, the Attorney General, or a law enforcement agency investigating a violation of this chapter.

Section 59-150-250.   (A)   A person who knowingly sells a lottery game ticket or share to a person under eighteen years of age or permits a person under eighteen years of age to play a lottery game is guilty of a misdemeanor and, upon conviction, must be fined not less than one hundred dollars nor more than five hundred dollars or be imprisoned not less than thirty days nor more than sixty days, or both, in the discretion of the court. It is an affirmative defense to a charge of a violation of this section that the lottery retailer reasonably and in good faith relied upon representation of proof of age in making the sale.


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(B)   A person under eighteen years of age who knowingly purchases a lottery game ticket is guilty of a misdemeanor and, upon conviction, must perform twenty hours of community service or must be fined not less than one hundred dollars and not more than five hundred dollars.

(C)   A lottery ticket or share must bear a conspicuous label prohibiting the play of the game by a person under eighteen years of age.

(D)   A lottery game using an electronic or mechanical device must bear a conspicuous label prohibiting the use of the device by a person under eighteen years of age. Electronic or mechanical device does not include machines and other gaming devices including video poker and games prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50.

(E)   A person who is incarcerated or on probation or parole who knowingly accepts a lottery prize is guilty of a misdemeanor and, upon conviction, must be fined not less than ten dollars nor more than one hundred dollars or imprisoned for not less than two days nor more than thirty days, or both.

(F) A person who is convicted of a violation of subsection (A) subjects his employer, for a first violation, to a fine not less than one hundred dollars nor more than two hundred fifty dollars; for a second violation, to a fine not less than two hundred fifty-one dollars nor more than five hundred dollars; and for a third and subsequent violation, to a fine not less than five hundred and one dollars and immediate license revocation by the commission.

Section 59-150-260.   (A)   A person who, with intent to defraud, falsely makes, alters, forges, utters, passes, or counterfeits a state lottery game ticket is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(B)   A person who influences or attempts to influence the winning of a prize through the use of coercion, fraud, deception, or tampering with lottery equipment or materials is guilty of a felony and, upon conviction, must be fined not more than fifty thousand dollars or imprisoned not more than five years, or both.

(C)   A person who is convicted of a violation of subsection (A) or (B) must not be the recipient of an award of a lottery prize or a portion of a lottery prize, and is ineligible for employment by the commission.

Section 59-150-270.   (A)   A person must not knowingly or intentionally make a material false statement in an application for a license or proposal to conduct lottery activities or a material false entry


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in a book or record which is compiled or maintained or submitted to the board or its designee pursuant to the provisions of this chapter. A person who violates the provisions of this section is guilty of a felony and, upon conviction, must be fined not more than twenty-five thousand dollars or the dollar amount of the false entry or statement, whichever is greater, or imprisoned for not more than five years, or both.

(B)   A person who is convicted of a violation of subsection (A) also must surrender his license immediately and is ineligible to be issued a license by the commission.

Section 59-150-275.   A person who specifically is made subject to the South Carolina Ethics Reform Act by this chapter and who knowingly violates a provision of this chapter that prohibits contributions to political campaigns or parties, independent expenditures to advance or defeat a lottery-related issue, employment of a lobbyist, representation of a client before the board as a former employee, or other prohibitions or restrictions relating to the unfair receipt of a pecuniary benefit from his association with the lottery, is guilty of a felony and, upon conviction, must be fined not more than twenty-five thousand dollars or imprisoned for not more than five years, or both.

Section 59-150-280.   (A)   The commission may enter into intelligence sharing, reciprocal use, or restricted use agreements with the federal government, law enforcement agencies, lottery regulation agencies, and gaming enforcement agencies of other jurisdictions which provide for and regulate the use of information provided and received pursuant to the agreement.

(B)   Records, documents, and information in the possession of the commission received pursuant to an intelligence sharing, reciprocal use, or restricted use agreement entered into by the commission with a federal department or agency, a law enforcement agency, or the lottery regulation or gaming enforcement agency of a jurisdiction are considered investigative records of a law enforcement agency and are subject to the confidentiality and disclosure policies, and must not be released without the permission of the person or agency providing the record or information, except as may be required by the Freedom of Information Act.

Section 59-150-290.   The commission shall enter into its contracts for procurements in compliance with the South Carolina Consolidated Procurement Code.


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Section 59-150-300.   (A)   Any lottery retailer, lottery vendor, applicant for a lottery retailer license, or lottery game ticket holder aggrieved by an action of the board may appeal that decision to the Administrative Law Judge Division. The action is subject to review by an administrative law judge on the record of the board, upon petition of the aggrieved person within ten days from receipt of official notice from the board of the action of which review is sought. Service of notice is presumed conclusively ten days after mailing by registered or certified mail to the applicant or licensee of notice at his last known address. An appeal to the Administrative Law Judge Division pursuant to this section is not a contested case as defined by the Administrative Procedures Act; however, the appeal is subject to the procedural due process requirements provided for in Article 5, Chapter 23, Title 1 and the Rules of Procedure of the Administrative Law Judge Division. Appeals regarding lottery vendor contracts must be brought pursuant to the South Carolina Procurement Code.

(B)   The Administrative Law Judge Division shall hear appeals from decisions of the board and, based upon the record of the proceedings before the board, may reverse the decision of the board only if the appellant proves the decision to be:

(1)   in violation of constitutional or statutory provisions;

(2)   in excess of the statutory authority of the board;

(3)   made upon unlawful procedure;

(4)   affected by other error of law;

(5)   clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6)   arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

(C)   The Administrative Law Judge Division may remand an appeal to the board to conduct further hearings.

(D)   For judicial review of a final decision of an administrative law judge in a case involving the commission, the petition by an aggrieved party must be filed with the circuit court and served on the opposing party not more than thirty days after the aggrieved party receives the final decision and order of the administrative law judge. Appeal in these matters is by right.

(E)   A lottery vendor who appeals the award of a procurement contract for the supply of a lottery game ticket system, share system, or an on-line or other mechanical or electronic system is liable for all costs of appeal and defense if the appeal is denied or the contract award is upheld. Cost of appeal and defense specifically includes, but is not


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limited to, administrative proceedings, court costs, bond, legal fees, and loss of income to the commission resulting from institution of the appeal if, upon the motion of the commission, the court finds the appeal was frivolous.

(F)   All actions and proceedings for review pursuant to this chapter, and all actions and proceedings to which the commission may be a party and in which a question arises pursuant to this chapter or pursuant to or concerning any order or decision of the commission must be given priority of hearing in all courts and reviewing entities over all other civil causes except election cases irrespective of position on the calendar.

Section 59-150-310.   (A)   The commission may expend, pursuant to the provisions of this chapter, monies received from any source, including income from the commission's operations, for effectuating its purposes, including the payment of the initial expenses of organization, administration, and operation of the commission and the lottery.

(B)   The commission must be self-sustaining and self-funded. Monies in the state general fund may not be used or obligated to pay the expenses of the commission or prizes of the lottery, and a claim for the payment of an expense of the lottery or prizes of the lottery may not be made against monies other than monies credited to the commission operating account.

(C)   The commission may purchase, lease, or lease-purchase goods or services necessary for effectuating the purposes of this chapter. The commission may make procurements which integrate functions such as lottery game design, lottery ticket distribution to a lottery retailer, supply of goods and services, and advertising. In all procurement decisions, the commission shall act to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objectives of raising net proceeds for the benefit of educational programs and purposes.

Section 59-150-320.   To ensure the financial integrity of the lottery, the commission, through its board, shall:

(1)   submit quarterly and annual reports to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the Comptroller General, the State Treasurer, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee disclosing the total lottery revenues, prize disbursements, operating expenses, and administrative expenses of the commission during the reporting period. The annual report


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additionally must describe the organizational structure of the commission, summarize the functions performed by each organizational division within the commission, and contain a detailed budget for the next fiscal year. The quarterly reports must be submitted within fifteen days of the end of the quarter, and the annual report must be submitted by October fifteenth;

(2)   adopt a system of internal audits;

(3)   maintain weekly or more frequently records of lottery transactions including the distribution of lottery game tickets or shares to a lottery retailer, revenues received, claims for prizes, prizes paid, prizes forfeited, and other financial transactions of the commission;

(4)   authorize the State Auditor to contract with a certified public accountant or firm for an independently audited financial statement prepared in accordance with generally accepted accounting principles, to be submitted to the Comptroller General's office each year no later than October fifteenth. The certified public accountant or firm shall not have a financial interest in a lottery vendor with whom the commission is under contract. The certified public accountant or firm shall evaluate the internal auditing controls in effect during the audit period. The cost of this annual financial audit is an operating expense of the commission. The State Auditor may at any time conduct an audit of any phase of the operations of the commission at the expense of the State and shall receive a copy of the annual independent financial audit. A copy of an interim audit performed by the certified public accountant or firm or the State Auditor must be transmitted after the close of the commission's fiscal year to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the State Treasurer, the Comptroller General, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee;

(5)   submit, for informational purposes only, to the Office of State Budget of the Budget and Control Board and the State Auditor by June thirtieth of each year a copy of the annual operating budget for the commission for the next fiscal year. This annual operating budget must be approved by the South Carolina Lottery Commission Board;

(6)   submit, for informational purposes only, to the Office of State Budget on November tenth of each year a proposed operating budget for the commission for the upcoming fiscal year;

(7)   adopt the same fiscal year as that used by state government; and


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(8)   authorize the Legislative Audit Council to contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not have a financial interesting a lottery vendor with whom the commission is under contract The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation.

Section 59-150-330.   (A)   All claimant agencies of this State and persons on whose behalf the State and its claimant agencies act, in conjunction with the commission, shall cooperate in identifying debtors who owe money to the State and who qualify for prizes pursuant to this chapter from the commission; and the sum of any debt owed to the State or to persons on whose behalf the State and its claimant agencies act must be set off against a prize awarded pursuant to this chapter. This section must be liberally construed to effectuate these purposes.

(B)   As used in this section:

(1)   'Claimant agency' means any state or local agency, department, board, bureau, commission, or authority to which an individual owes a debt or which acts on behalf of an individual to collect a debt.

(2)   'Debt' means a liquidated sum due and owing a claimant agency, which sum has accrued through contract, subrogation, tort, or operation of law regardless of whether there is an outstanding judgment for the sum, or a sum which is due and owing a person and is enforceable by the State or any of its agencies or departments.

(3)   'Debtor' means an individual owing money to or having a delinquent account with a claimant agency, which obligation has not been adjudicated as satisfied by court order, set aside by court order, or discharged in bankruptcy.

(4)   'Prize' means the proceeds of a lottery prize awarded pursuant to this chapter.

(C)   The collection remedy authorized by this section is in addition to and not in substitution for any other remedy available by law.

(D)(1)   A claimant agency may submit to the commission a list of the names of all persons owing debts in excess of one hundred dollars to the claimant agency or to persons on whose behalf the claimant agency acts. The full amount of the debt is collectible from lottery winnings without regard to limitations on the amounts that may be


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collectible in increments through garnishment or other proceedings. The list constitutes a valid lien upon and claim of lien against the lottery winnings of a debtor named in the list. The list must contain the names of the debtors, their Social Security numbers if available, and other information which would assist the commission in identifying the debtors named in the list.

(2)   The commission shall withhold winnings subject to the lien created by this section and send notice to the winner by certified mail, return receipt requested, of such action and the reason why the winnings were withheld. If the winner appears and claims winnings in person, the commission shall notify the winner at that time, by hand delivery, of the action. If the debtor does not protest, in writing, the withholding of the funds within thirty days of notice, the commission shall pay the funds over to the claimant agency. If the debtor protests the withholding of funds, in writing, within thirty days of the notice, the commission shall file an action in interpleader in the circuit court of the county in which the debtor resides, pay the disputed sum into the court, and give notice to the claimant agency and debtor of the initiation of the action.

(3)   The liens created by this section rank among themselves as follows:

(a)   taxes due the State;

(b)   delinquent child support;

(c)   delinquent student loans; and

(d)   all other judgments and liens in order of the date entered or perfected.

(4)   The commission is not required to deduct claimed debts from prizes paid out by a lottery retailer or entities other than the commission.

(5)   A list of debtors and debts must be provided, pursuant to this section, periodically as the commission determines by rules and regulations, and the commission is not obligated to retain the lists or deduct debts appearing on the lists beyond the period determined by the rules and regulations.

(6)   The commission may prescribe forms, propose rules, and promulgate regulations necessary to carry out the provisions of this section.

(7)   The commission and a claimant agency do not incur civil or criminal liability for good faith adherence to the provisions of this section.


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(8)   The claimant agency shall pay the commission for all costs incurred by the commission in setting off debts in the manner provided in this section. The commission may retain this fee as part of administrative expenses.

(E)(1)   Notwithstanding Section 59-150-240 or other confidentiality law, the commission may provide to a claimant agency all information necessary to accomplish and effectuate the intent of this section.

(2)   The information obtained by a claimant agency from the commission pursuant to this section must retain its confidentiality and may be used only by a claimant agency in the pursuit of its debt collection duties and practices. An employee or former employee of a claimant agency who unlawfully discloses this information for another purpose, except as otherwise specifically authorized by law, is subject to penalties as provided by law.

(F)   The provisions of this section apply to prizes of six hundred dollars or more.

Section 59-150-340.   The net proceeds received from the state lottery for education as provided by law must be deposited by the State Treasurer in a fund separate and distinct from the state general fund entitled the 'Education Lottery Account'. All interest or income earned by the fund must be retained in the account and used for its stated purposes. However, all revenue received by the Education Lottery Account in any fiscal year together with earnings on it for that year must be disbursed as required by Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. It is the intent of the General Assembly in creating this Education Lottery Account that its funds be managed so as to establish and fund these programs permanently. Upon receipt of monies transferred to the Education Lottery Account held by the State Treasurer, these monies must be appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the programs and for the purposes stipulated in Section 59-150-350. The Comptroller General shall record these revenues received on a cash basis, and disbursements for the purposes provided also must be on a cash basis; however, unexpended funds at the end of a fiscal year after disbursement to the programs authorized to receive the funds as provided in Section 59-150-350 and as appropriated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for


Printed Page 3168 . . . . . Thursday, May 3, 2001

previous or current fiscal years may be carried forward to future years and expended for the same purposes.

Section 59-150-350.   (A)   All lottery proceeds are the property of the commission, to be held in a separate and distinct account, apart from the State Treasury. Annual administrative expenses may not exceed fifteen percent of gross lottery revenues for the year, including lottery retailer commissions and incentives. The General Assembly shall consider, in the allocation of funds from the Education Lottery Account, the allocation of monies in the amount the General Assembly determines for the Commission on Higher Education and for the Administrative Law Judge Division, both to help defray their expenses incurred in the performance of their duties pursuant to this chapter; except that the amount of funding for the Commission on Higher Education and the Administrative Law Judge Division must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. As nearly as practical, an amount no less than forty-five percent of the amount of money from the actual sale of lottery tickets or shares must be made available as prize money, except that this item does not create a lien, an entitlement, a cause of action, or other private right, and rights of holders of tickets or shares must be determined by the commission in setting the terms of its lottery or lotteries.

(B)   Before the sixteenth day of each month, the commission shall deposit to the State Treasurer, for credit to the Education Lottery Account for the preceding month, the amount of all net proceeds from the preceding month. The State Comptroller General shall account separately for net proceeds by establishing and maintaining a restricted account known as the Education Lottery Account. Upon their deposit with the State, monies representing a deposit of net proceeds become the unencumbered property of the State of South Carolina and the commission may not agree or undertake otherwise. The monies may be invested by the State Treasurer pursuant to state investment practices. All earnings attributable to the investments are also the unencumbered property of the State and accrue to the credit of the Education Lottery Account.

(C)   At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds.


Printed Page 3169 . . . . . Thursday, May 3, 2001

Appropriations from the Education Lottery Account must be allocated only for educational purposes and educational programs by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and first must be used to provide Palmetto Fellows Scholarships to all eligible applicants, then used to provide Life scholarships for eligible resident students attending two-year or four-year public institutions or technical colleges in those amounts provided by law, up to one percent of net proceeds to the South Carolina State Library for public library state aid, to be distributed to county public libraries on a per capita basis and to be used for educational technology delivery, upgrade, and maintenance, except that a public library that offers public access to the internet must use an internet screening or filtering program to receive this funding, and funding with all the remaining revenues for: elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences, and Youth Education Scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations bill, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, home school, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child after the department confirms that the program meets the following criteria that include, but are not limited to, language and literacy programs that help the child understand and tell stories, recognize pictures and words, learn the alphabet, and understand that writing is communication; math concepts that teach the child to count and sort objects into groups, recognize shapes, and make comparisons of size, shape, length, and weight;

Printed Page 3170 . . . . . Thursday, May 3, 2001

science concepts that teach the child to explore the natural environment, observe seasonal changes, communicate observations, and use tools to measure; art concepts that help the child express ideas and thoughts in creative ways, paint, draw, and sculpt, listen to music and sing songs, and recognize colors; and physical development activities that help the child move with balance and coordination, participate in indoor and outdoor physical activity, and use writing tools, puzzles, scissors, blocks, clay, and computers. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.

(D)   Appropriations by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years for educational purposes and programs from the account not committed during the fiscal year must be credited to the Education Lottery Account.

(E)(1)   A program or project started specifically from lottery proceeds may not be continued from the general fund, but the programs must be adjusted or discontinued according to available lottery proceeds, unless the General Assembly by general law establishes eligibility requirements and later appropriates specific funds within the general appropriations act. The provisions of this subsection do not prohibit the providing of supplemental funding to programs or projects in existence on the effective date of this chapter from lottery proceeds; provided, that funding for these existing programs or projects from the state general fund, the Education Improvement Act, or other nonlottery sources may not be reduced below that provided on the effective date of this chapter.

(2)   A surplus in the Education Lottery Account may not be reduced by the General Assembly to correct any nonlottery deficiencies in sums available for general appropriations and vice versa, and a surplus in the Education Lottery Account may not be included in a surplus calculated for setting aside any nonlottery reserve, specifically, without limitation, the General Reserve Fund or the Capital Reserve Fund."
SECTION   3.   Section 59-149-10 of the 1976 Code is amended by adding at the end to read:


Printed Page 3171 . . . . . Thursday, May 3, 2001

"(E)(1)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as defined in this chapter is increased to the cost of tuition for thirty credit hours a year or its equivalent plus a three hundred dollar a year book allowance. Tuition for this purpose means the amount charged for registering for credit hours of instruction and shall not include other fees, charges, or costs of textbooks except for the referenced three hundred dollar book allowance.

(2)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year independent institution must be the cost of attendance up to a maximum of the average annual cost of tuition at the state's four-year public institutions of higher learning in the corresponding academic year, and the annual amount for eligible resident students attending a two-year independent institution must increase to the cost of attendance up to a maximum of the cost of tuition at a two-year regional public institution, both for thirty credit hours a year or its equivalent.

(3)   Beginning with the school year 2002-2003, the requirement that high school completion be accomplished on or after May 1995, for eligibility for the LIFE Scholarship is waived."
SECTION   4.   Section 59-149-50 of the 1976 Code is amended by adding subsections (D), (E), and (F) to read:

"(D)   Beginning with school year 2002-2003, an entering freshman to be eligible for a LIFE Scholarship in addition to the other requirements of this chapter shall meet two of the following three criteria:

(1)   have the grade point average required by this section;

(2)   have the Scholastic Aptitude Test (SAT) or equivalent ACT score required by this section;

(3)   be in the top thirty percent of his high school graduating class.

For home school students and students whose high school graduating class is less than fifty students, the Commission on Higher Education may define alternative criteria for students to meet the requirement of item (3).

After receipt of a LIFE Scholarship by an entering freshman beginning with school year 2002-2003, a student shall meet the criteria established in this chapter to retain or regain the scholarship.

(E)   Notwithstanding the provisions of this section and the other requirements of this chapter, beginning with school year 2002-2003,


Printed Page 3172 . . . . . Thursday, May 3, 2001

students attending a technical college of this State taking not less than eighteen credit hours of instruction a year but less than thirty credit hours a year who are otherwise eligible for a LIFE scholarship shall receive a LIFE scholarship equal to one-half the amount that eligible students receive at the technical college who take at least thirty credit hours of instruction a year.

(F)   In the absence of official school records to document the required grade point average for students attending a technical college, a satisfactory score on an admissions exam administered by the technical college is sufficient to meet the grade point average requirement."
SECTION   5.   The 1976 Code is amended by adding:

"Section 59-149-56.   Notwithstanding any other provision of law, students attending a technical college of this State after having received a GED certificate who have a 3.0 average on a 4.0 scale after the first semester meet the requirements for receiving a life scholarship under this chapter."
SECTION   6.   The 1976 Code is amended by adding:

"Section 59-149-58.   Notwithstanding any other provision of law, students attending a technical college of this State who are at least twenty-five years of age and who have a 3.0 average on a 4.0 scale after the first semester meet the academic requirements for receiving a life scholarship under this chapter at that technical college."
SECTION   7.   The 1976 Code is amended by adding:

"Section 2-15-63.   (A)   Beginning in December 2004 and every three years after that, the Legislative Audit Council shall conduct a management performance audit of the South Carolina Lottery Commission. The cost of this audit is an operating expense of the commission.

(B)   Nothing in this section limits, abridges, or otherwise affects the provisions of Section 2-15-60.

(C)   The Legislative Audit Council may contract with an independent firm experienced in security procedures including, but not limited to, computer security and systems security, to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the commission and the lottery. This firm may not have a financial interest in a lottery vendor with whom the commission is under contract. The cost of this evaluation is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the evaluation."


Printed Page 3173 . . . . . Thursday, May 3, 2001

SECTION   8.   Section 12-36-2120 of the 1976 Code is amended by adding an appropriately numbered item to read:

"( )   a lottery ticket sold pursuant to Chapter 150 of Title 59;"
SECTION   9.   Section 59-63-210 of the 1976 Code is amended to read:

"Section 59-63-210.   (A)   Any district board of trustees may authorize or order the expulsion, suspension, or transfer of any pupil for a the commission of any crime, gross immorality, gross misbehavior, persistent disobedience, or for violation of written rules and promulgated regulations established by the district board, county board, or the State Board of Education, or when the presence of the pupil is detrimental to the best interest of the school. Every Each expelled pupil shall have has the right to petition for readmission for the succeeding school year. Expulsion or suspension shall must be construed to prohibit a pupil from entering the school, or school grounds, except for a prearranged conference with an administrator, attending any day or night school functions, or riding a school bus. The provisions of this section shall do not preclude enrollment and attendance in any adult or night school.

(B)   A district board of trustees shall not authorize or order the expulsion, suspension, or transfer of any pupil for a violation of Section 59-150-250(B)."
SECTION   10.   Except for Section 59-150-350(C), (D), and (E), provisions of this chapter relating to guidelines for the appropriation of lottery proceeds must not be amended in a general appropriations act, but only in a separate piece of legislation solely for that purpose and by a majority vote of those present and voting in both houses of the General Assembly.
SECTION   11.   The General Assembly shall review and evaluate, on a regular basis but at least biannually, the operation of the South Carolina Education Lottery and the success and efficiency with which the South Carolina Lottery Commission has undertaken that responsibility. The General Assembly, after each review and evaluation, may determine to:

(1)   transfer the whole or any part of the functions of the commission to the jurisdiction and control of any other agency;

(2)   consolidate, coordinate, or combine the functions of the commission with any other agency;

(3)   redirect any mission of the commission;

(4)   abolish any mission of the commission in whole or any part; or


Printed Page 3174 . . . . . Thursday, May 3, 2001

(5)   abolish all or any part of the functions of the commission.
SECTION   12.   Criminal penalties contained in Chapter 150, Title 59 apply only to offenses committed on or after the effective date of this act.
SECTION   13.   The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release, or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision so expressly provides. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION   14.   If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding does not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION   15.   A statewide advisory referendum shall be held at the same time as the November 2004 general election as to whether or not the qualified electors of this State want to continue a State Education Lottery. Ballots must be provided at the various voting precincts with the following words printed or written on the ballot:

"Do you favor continuing the Sate Education Lottery?

Yes   []
No   []

Those voting in favor of the question shall deposit a ballot with a check or cross mark in the square after the word 'Yes', and those voting against the question shall deposit a ballot with a check or cross mark in the square after the word 'No'."

The results of the advisory referendum shall be reported by the State Election Commission to the General Assembly and the Governor in


Printed Page 3175 . . . . . Thursday, May 3, 2001

January 2005. The cost of this statewide advisory referendum shall be paid by the State.
SECTION   16.   This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.

Rep. HARRELL explained the amendment.

Rep. JENNINGS spoke against the amendment.
Rep. KNOTTS spoke in favor of the amendment.

The question then recurred to the adoption of the amendment.

Rep. KENNEDY demanded the yeas and nays which were taken, resulting as follows:

Yeas 77; Nays 41

Those who voted in the affirmative are:

Allison                Altman                 Bales
Barfield               Barrett                Bingham
Campsen                Carnell                Cato
Chellis                Coates                 Cooper
Cotty                  Dantzler               Davenport
Delleney               Easterday              Edge
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Klauber
Knotts                 Koon                   Law
Leach                  Limehouse              Littlejohn
Loftis                 Lucas                  Martin
McCraw                 McGee                  Merrill
Owens                  Parks                  Perry
Quinn                  Rhoad                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Scott
Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Thompson

Printed Page 3176 . . . . . Thursday, May 3, 2001

Townsend               Tripp                  Trotter
Vaughn                 Walker                 Webb
White                  Wilder                 Wilkins
Young, A.              Young, J.

Total--77

Those who voted in the negative are:

Allen                  Battle                 Bowers
Breeland               Brown, G.              Brown, R.
Clyburn                Cobb-Hunter            Coleman
Emory                  Freeman                Gourdine
Govan                  Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Howard                 Jennings               Kennedy
Kirsh                  Lee                    Lloyd
Lourie                 Mack                   McLeod
Miller                 Moody-Lawrence         Neal, J.H.
Neal, J.M.             Ott                    Phillips
Rivers                 Rutherford             Sheheen
Smith, F.N.            Smith, J.E.            Snow
Whatley                Whipper

Total--41

So, the amendment was adopted.

Rep. KELLEY proposed the following Amendment No. 24 (Doc Name COUNCIL\SKB\AMEND\18493SOM01), which was adopted:
Amend the bill, as and if amended, by deleting Section 59-149-50(D) as contained in SECTION 4 and inserting:
/   (D)   Beginning with school year 2002-2003, an entering freshman at a four-year institution to be eligible for a LIFE Scholarship in addition to the other requirements of this chapter shall meet two of the following three criteria:

(1)   have the grade point average required by this section;

(2)   have the Scholastic Aptitude Test (SAT) or equivalent ACT score required by this section;

(3)   be in the top thirty percent of his high school graduating class.


Printed Page 3177 . . . . . Thursday, May 3, 2001

For home school students and students whose high school graduating class is less than fifty students, the Commission on Higher Education may define alternative criteria for students to meet the requirement of item (3).

After receipt of a LIFE Scholarship by an entering freshman beginning with school year 2002-2003, a student shall meet the criteria established in this chapter to retain or regain the scholarship. /
Renumber sections to conform.
Amend title to conform.

Rep. KELLEY explained the amendment.

The question then recurred to the adoption of the amendment.

Rep. KENNEDY demanded the yeas and nays which were taken, resulting as follows:

Yeas 100; Nays 14

Those who voted in the affirmative are:

Allison                Altman                 Bales
Barfield               Barrett                Battle
Bingham                Bowers                 Campsen
Carnell                Cato                   Chellis
Clyburn                Coates                 Coleman
Cooper                 Cotty                  Dantzler
Davenport              Delleney               Easterday
Edge                   Emory                  Fleming
Freeman                Frye                   Gilham
Gourdine               Hamilton               Harrell
Harrison               Harvin                 Haskins
Hayes                  Hines, J.              Hines, M.
Hinson                 Hosey                  Huggins
Jennings               Keegan                 Kelley
Kirsh                  Klauber                Knotts
Koon                   Law                    Leach
Limehouse              Loftis                 Lourie
Lucas                  Martin                 McCraw
McGee                  McLeod                 Merrill
Miller                 Moody-Lawrence         Neal, J.M.
Ott                    Owens                  Parks
Perry                  Phillips               Quinn

Printed Page 3178 . . . . . Thursday, May 3, 2001

Rhoad                  Rice                   Riser
Rivers                 Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Sheheen                Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.E.
Smith, J.R.            Smith, W.D.            Snow
Stuart                 Talley                 Taylor
Thompson               Townsend               Tripp
Trotter                Vaughn                 Walker
Webb                   Whatley                White
Wilder                 Wilkins                Young, A.
Young, J.

Total--100

Those who voted in the negative are:

Allen                  Breeland               Brown, R.
Govan                  Howard                 Kennedy
Lee                    Lloyd                  Mack
Neal, J.H.             Rutherford             Scott
Weeks                  Whipper

Total--14

So, the amendment was adopted.

Rep. HARRELL proposed the following Amendment No. 25 (Doc Name COUNCIL\BBM\AMEND\10322HTC01), which was rejected:
Amend the bill, as and if amended, in Section 59-150-230(A), in the fourth sentence, by striking /impose a tax/ and inserting / impose a tax, other than the state sales tax imposed pursuant to Chapter 36 of Title 12 and local sales taxes authorized by state law, /
Amend further, as and if amended, by striking SECTION 6 and inserting:
/ SECTION   6.   Section 12-36-110(1) of the 1976 Code is amended by adding an appropriately lettered subitem at the end to read:

"( )   sales of lottery tickets pursuant to Chapter 150 of Title 59." /
Amend title to conform.

Rep. HARRELL spoke against the amendment.
Rep. ROBINSON spoke in favor of the amendment.


Printed Page 3179 . . . . . Thursday, May 3, 2001

Rep. HARRELL moved to table the amendment.

Rep. ROBINSON demanded the yeas and nays, which were not ordered.

The House refused to table the amendment by a division vote of 43 to 43.

The question then recurred to the adoption of the amendment.

Rep. KNOTTS demanded the yeas and nays which were taken, resulting as follows:

Yeas 51; Nays 61

Those who voted in the affirmative are:

Allison                Altman                 Bingham
Campsen                Cato                   Coates
Cobb-Hunter            Cooper                 Dantzler
Delleney               Easterday              Fleming
Frye                   Gilham                 Hamilton
Haskins                Huggins                Klauber
Koon                   Leach                  Littlejohn
Loftis                 Lucas                  Martin
McGee                  McLeod                 Merrill
Perry                  Phillips               Quinn
Rice                   Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, W.D.            Stille
Stuart                 Talley                 Taylor
Townsend               Tripp                  Trotter
Vaughn                 Walker                 Young, J.

Total--51

Those who voted in the negative are:

Allen                  Askins                 Bales
Barfield               Barrett                Battle
Bowers                 Breeland               Brown, G.
Brown, R.              Carnell                Chellis
Clyburn                Coleman                Cotty

Printed Page 3180 . . . . . Thursday, May 3, 2001

Edge                   Emory                  Freeman
Gourdine               Govan                  Harrell
Harvin                 Hayes                  Hines, J.
Hines, M.              Hinson                 Hosey
Jennings               Keegan                 Kelley
Kennedy                Kirsh                  Knotts
Law                    Lee                    Limehouse
Lloyd                  Lourie                 Mack
McCraw                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Owens                  Rhoad                  Riser
Rivers                 Rutherford             Scott
Smith, J.E.            Smith, J.R.            Snow
Thompson               Webb                   Weeks
Whipper                White                  Wilder
Young, A.

Total--61

So, the amendment was rejected.

Rep. JENNINGS proposed the following Amendment No. 26 (Doc Name COUNCIL\PT\AMEND\1493DW01), which was tabled:
Amend the bill, as and if amended, Section 59-150-350(C) as contained in SECTION 2, by deleting the fourth sentence and inserting:
/ Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated to full funding of the LIFE Scholarship for eligible resident students attending a four-year or two-year public or independent institution or technical college as provided in Sections 59-149-10(E) and 59-149-50(D), and funding with all the remaining revenues for: elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences,


Printed Page 3181 . . . . . Thursday, May 3, 2001

and Youth Education Scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations bill, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. /
Amend further, by deleting SECTION 3 and inserting:
/ SECTION   3.   Section 59-149-10 of the 1976 Code is amended by adding at the end to read:

"(E)(1)   Beginning with school year 2002-2003, the annual amount of a LIFE Scholarship for eligible resident students attending a four-year or two-year public or independent institution or technical college as defined in this chapter is increased to the cost of tuition for thirty credit hours a year or its equivalent plus a three hundred dollar a year book allowance. Provided, however, the annual amount for eligible resident students attending a two-year independent institution may be no more than the cost of tuition at a two-year regional public institution for thirty credit hours a year or its equivalent. Tuition for this purpose means the amount charged for registering for credit hours of instruction and shall not include other fees, charges, or costs of textbooks except for the referenced three hundred dollar book allowance.

(2)   Beginning with the school year 2002-2003, the requirement that high school completion be accomplished on or after May 1995, for eligibility for the LIFE Scholarship is waived." /
Renumber sections to conform.
Amend title to conform.

Rep. CAMPSEN moved to table the amendment, which was agreed to.

Reps. CARNELL, BARRETT, D. C. SMITH, RODGERS, COLEMAN, WILDER, MILLER, HAYES, J. H. NEAL, J. M. NEAL, EMORY, JENNINGS, ASKINS, KLAUBER, BOWERS, BREELAND, HARVIN, PARKS, G. BROWN, BALES, SNOW, MCCRAW, PHILLIPS, OTT, COBB-HUNTER, CLYBURN, MCLEOD, BATTLE, HOSEY, KENNEDY, M. HINES, RHOAD, GILHAM, LLOYD, STILLE, FREEMAN and J.E. SMITH proposed the following Amendment No. 28 (Doc Name COUNCIL\DKA\ AMEND\4400MM01), which was tabled:


Printed Page 3182 . . . . . Thursday, May 3, 2001

Amend the bill, as and if amended, Section 59-150-350(C), SECTION 2, by deleting the subsection and inserting:
/ (C)   At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds. Appropriations from the Education Lottery Account must be allocated only for educational purposes and programs by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated to full funding of the LIFE Scholarship for eligible resident students attending a four-year or two-year public institution or technical college as provided in Sections 59-149-10(E) and 59-149-50(D), up to one percent not exceeding one million dollars to the South Carolina State Library for public library state aid, to be distributed to county public libraries on a per capita basis and to be used for educational technology delivery, upgrade, and maintenance, and funding with all the remaining revenues for: elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences, and Youth Education Scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations bill, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child. These programs may include, but are not limited to, language and literacy programs that help the child understand and

Printed Page 3183 . . . . . Thursday, May 3, 2001

tell stories, recognize pictures and words, learn the alphabet, and understand that writing is communication; math concepts that teach the child to count and sort objects into groups, recognize shapes, and make comparisons of size, shape, length, and weight; science concepts that teach the child to explore the natural environment, observe seasonal changes, communicate observations, and use tools to measure; art concepts that help the child express ideas and thoughts in creative ways, paint, draw, and sculpt, listen to music and sing songs, and recognize colors; and physical development activities that help the child move with balance and coordination, participate in indoor and outdoor physical activity, and use writing tools, puzzles, scissors, blocks, clay, and computers. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery. /
Amend title to conform.

Rep. CARNELL explained the amendment.

SPEAKER PRO TEMPORE IN CHAIR

Rep. CARNELL continued speaking.
Rep. HARRELL spoke against the amendment.

Rep. HARRELL moved to table the amendment.

Rep. CARNELL demanded the yeas and nays which were taken, resulting as follows:

Yeas 61; Nays 50

Those who voted in the affirmative are:

Allison                Altman                 Barfield
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Dantzler
Delleney               Easterday              Edge
Fleming                Frye                   Hamilton
Harrell                Harrison               Haskins

Printed Page 3184 . . . . . Thursday, May 3, 2001

Hinson                 Huggins                Keegan
Kelley                 Kirsh                  Klauber
Knotts                 Koon                   Leach
Limehouse              Littlejohn             Loftis
Lucas                  Martin                 McGee
Merrill                Moody-Lawrence         Owens
Perry                  Quinn                  Rice
Robinson               Sandifer               Sharpe
Simrill                Smith, D.C.            Smith, J.R.
Stuart                 Talley                 Taylor
Thompson               Tripp                  Trotter
Vaughn                 Walker                 Webb
White                  Wilkins                Young, A.
Young, J.

Total--61

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, R.              Carnell                Clyburn
Cobb-Hunter            Coleman                Emory
Freeman                Gilham                 Gourdine
Govan                  Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Howard                 Jennings               Kennedy
Lee                    Lloyd                  Lourie
Mack                   McCraw                 McLeod
Miller                 Neal, J.H.             Neal, J.M.
Ott                    Parks                  Phillips
Rhoad                  Riser                  Rivers
Rodgers                Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Snow                   Stille                 Weeks
Whipper                Wilder

Total--50

So, the amendment was tabled.


Printed Page 3185 . . . . . Thursday, May 3, 2001

Rep. LEACH proposed the following Amendment No. 29 (Doc Name COUNCIL\SKB\AMEND\18457SOM01), which was adopted:
Amend the bill, as and if amended, in Section 59-150-20(7) as contained in SECTION 2 by adding after:
/ The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, except a machine or device dispensing a lottery ticket, and 16-19-50. /
/ The operation of lottery games also excludes multi-state lottery promotions, including, but not limited to, power-ball games. /
Amend the bill further by striking Section 59-150-50(7) in its entirety and renumber items.
Amend the bill in Section 59-150-70 by deleting the fourth sentence which reads:
/ The only lottery games that may be played pursuant to these temporary regulations, policies, and procedure are instant tickets, dollar tickets, and dollar joint- or multi-state lottery games. / and inserting:
/ The only lottery games that may be played pursuant to these temporary regulations, policies, and procedures are instant tickets and dollar tickets. /
Amend the bill further by striking Section 59-150-230(C)(5) in its entirety and inserting:
/   (5)   A holder of a winning lottery game ticket or share from a lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter. /
Renumber sections to conform.
Amend title to conform.

Rep. LEACH explained the amendment.

The amendment was then adopted by a division vote of 41 to 33.

Reps. DELLENEY, LUCAS and SIMRILL proposed the following Amendment No. 30 (Doc Name COUNCIL\DKA\AMEND\ 4376MM01), which was tabled:
Amend the bill, as and if amended, by inserting:


Printed Page 3186 . . . . . Thursday, May 3, 2001

/ Section 59-150-275.   A person who specifically is made subject to the South Carolina Ethics Reform Act by this chapter and who knowingly violates a provision of this chapter that prohibits contributions to political campaigns or parties, independent expenditures to advance or defeat a lottery-related issue, employment of a lobbyist, representation of a client before the board as a former employee, or other prohibitions or restrictions relating to the unfair receipt of a pecuniary benefit from his association with the lottery, is guilty of a felony and, upon conviction, must be fined not more than twenty-five thousand dollars or imprisoned for not more than five years, or both. /
Amend title to conform.

Rep. DELLENEY moved to table the amendment, which was agreed to.

Reps. DELLENEY and MCGEE proposed the following Amendment No. 34 (Doc Name NBD\AMEND\11662MM01), which was adopted:
Amend the bill, as and if amended, Section 59-150-20, as contained in SECTION 2, by deleting item (7) and inserting:

/(7)   'Lottery', 'lotteries', 'lottery game', or 'lottery games' means a game of chance approved by the General Assembly and operated pursuant to this chapter including, but not limited to, instant tickets, on-line lottery games and drawing numbers but excluding keno, pari-mutuel betting, and casino gambling as defined in this section. A lottery game may not exceed the price of one dollar for one play. The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50. The access and use of an electronic or mechanical machine designed for a lottery game authorized pursuant to this chapter must be limited to a lottery retailer and his employees only in order to facilitate retail sales of lottery tickets, and such a machine must not dispense anything other than lottery tickets.

As used in this item, 'casino gambling' means a location or business for the purpose of conducting unlawful gambling activities, but excluding the sale and purchase of lottery game tickets or shares; and 'pari-mutuel betting' means a method or system of wagering on actual races including races involving horses or dogs at tracks and the distribution of winnings by pools. /


Printed Page 3187 . . . . . Thursday, May 3, 2001

Amend further, in Section 59-150-70(2), before /cash only/ by inserting /no more than one dollar and /.
Amend title to conform.

Rep. MCGEE explained the amendment.
The amendment was then adopted.

Rep. JENNINGS proposed the following Amendment No. 40 (Doc Name COUNCIL\DKA\AMEND\4440MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-350(C), SECTION 2, by inserting after /clay, and computers./ in the penultimate sentence, the following sentence to read:
/ Funds also must be allocated, in an amount determined by the General Assembly in the annual general appropriations bill, to the Department of Education for the purchase of new school buses, supplemental to any bond bills authorizing the purchase of new school buses. /
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 41 (Doc Name COUNCIL\NBD\AMEND\11650AC01), which was tabled:
Amend the bill, as and if amended, by deleting Section 59-150-130 (G) and inserting:
/(G)   A former public official holding public office, a former public member holding public membership, or a former public employee having public employment on or after the effective date of this chapter may not serve a lottery vendor for a period of five years after terminating his public service or employment./
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 42 (Doc Name COUNCIL\GJK\AMEND\20623SD01), which was tabled:
Amend the bill, as and if amended, Section 59-150-20(7) as contained in SECTION 2, by inserting after the first sentence / The


Printed Page 3188 . . . . . Thursday, May 3, 2001

operation of the lottery games excludes joint or multi-state, or multi-sovereign lottery games. /
Amend further, Section 59-150-60(A) as contained in SECTION 2, by deleting item (7) in its entirety.
Amend further, Section 59-150-70 as contained in SECTION 2, by striking the fourth sentence and inserting:
/ The only lottery games that may be played pursuant to these temporary regulations, policies, and procedures are instant tickets and dollar tickets. /
Amend further, Section 59-150-230(C) as contained in SECTION 2 by deleting item (5) and inserting:
/     (5)   A holder of a winning lottery game ticket or share from a lottery game or lottery must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 43 (Doc Name COUNCIL\SWB\AMEND\5450DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 2, Section 59-150-150(B)(2)(i), by striking subitem (i) in its entirety and inserting:

/ (i)   has its place of business located within one thousand feet of the nearest property line of a church, school, playground, or residence. These distances must be measured in a straight line, without regard to intervening structures or objects, from the nearest property line of the lot on which a building or structure is used as a lottery retailer to the nearest property line of the location of the church, school, playground, or residence which are defined as follows:

(i)     'church' means an establishment, other than a private dwelling, where religious services are usually conducted;


Printed Page 3189 . . . . . Thursday, May 3, 2001

(ii)   'school' means an establishment, other than a private dwelling, where the usual processes of education are usually conducted;

(iii)   'playground' means a place, other than grounds at a private dwelling, which is provided by the public or members of a community for recreation; and

(iv)   'residence' means a private dwelling. /
Amend the bill further, as and if amended, SECTION 2, Section 59-150-210(D), by striking subparagraph (D) in its entirety and inserting:
/ (D)   A lottery ticket or share may not be sold on the date of any general elections; within one thousand feet of the nearest property line of a church, school, playground, or residence as provided in Section 59-150-150(B)(2)(i); to a lottery game other than that defined in Section 59-150-20(7); or to a lottery game with corporate sponsorship. /
Renumber sections to conform.
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 44 (Doc Name COUNCIL\SWB\AMEND\5451DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 2, Section 59-150-230, by adding a new subparagraph appropriately numbered at the end to read:
/ ( )   A person distributing prizes or winnings to a resident or nonresident of five hundred dollars or more shall withhold seven percent of each distribution made to an individual, partnership, trust, or estate and five percent of each distribution made to a corporation or other entity. In lieu of the provisions of Section 12-8-530 the prize recipient may elect to have the person distributing the prize pay over the amount withheld to a public school, public school district, or public institution of higher learning in this State as designated by the prize recipient. /
Renumber sections to conform.
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.


Printed Page 3190 . . . . . Thursday, May 3, 2001

Rep. JENNINGS proposed the following Amendment No. 45 (Doc Name COUNCIL\SWB\AMEND\5452DJC01), which was tabled:
Amend the bill, as and if amended, SECTION 2, Section 59-150-150(A), by striking the second sentence of subsection (A) and inserting:
/ A lottery retailer's sales of lottery tickets or shares may not exceed thirty-three and one-third percent annually of its total business as measured by gross revenues. /
Amend the bill further, as and if amended, SECTION 2, Section 59-150-150(B)(2)(g), by striking subitem (g) in its entirety and inserting:
/ (g)   has a business of selling lottery tickets or shares that accounts for more than thirty-three and one-third percent annually of its gross revenues, except that the commission may not sell or give away lottery tickets or shares as a lottery retailer, as provided in Section 59-150-210. /
Renumber sections to conform.
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 46 (Doc Name COUNCIL\SWB\AMEND\5458DJC01), which was tabled:
Amend the bill, as and if amended, Section 59-150-210(D), SECTION 2, by adding a new sentence at the end of subsection (d) to read:
/ A lottery ticket or share may not be sold at a location that serves alcohol for on-premise consumption./
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 47 (Doc Name COUNCIL\SWB\AMEND\5459DJC01), which was tabled:
Amend the bill, as and if amended, Section 59-150-60(A)(17), SECTION 2, by striking /probability of winning;/ between /explanation of the permitted use of lottery proceeds;/ and /an entertainment


Printed Page 3191 . . . . . Thursday, May 3, 2001

context;/ in the second paragraph of item (17) and inserting /probability of winning and losing;/
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 49 (Doc Name COUNCIL\SWB\AMEND\5457DJC01), which was tabled:
Amend the bill, as and if amended, Section 59-150-20(7) as contained in SECTION 2, by striking the first sentence of item (7) and inserting:

/(7)   'Lottery', 'lotteries', 'lottery game', or 'lottery games' means a game of chance approved by the General Assembly and operated pursuant to this chapter including instant tickets and drawing numbers, and excluding lottery games using mechanical or electronic devices, keno, pari-mutuel betting, and casino gambling as defined in this section. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 50 (Doc Name COUNCIL\NBD\AMEND\11656AC01), which was tabled:
Amend the bill, as and if amended, Section 59-150-150(A) immediately after /The commission shall develop and maintain a statewide network of lottery retailers to serve the public convenience and promote the sale of tickets or shares and the playing of lottery games as defined in Section 59-150-20(7) while ensuring the integrity of the lottery operations, games, and activities./ by inserting /Under no circumstances may a lottery retailer offer for play or provide any type of video poker machine or lottery game prohibited by Sections 12-21-2710, 16-19-40, and 16-19-50/.
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.


Printed Page 3192 . . . . . Thursday, May 3, 2001

Reps. JENNINGS proposed the following Amendment No. 52 (Doc Name COUNCIL\NBD\AMEND\11657MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-230(I) by inserting after the first sentence:
/ A portion of the unclaimed prized money, in an amount to be determined by the General Assembly in its annual general appropriations bill and other bills appropriating monies for previous or current fiscal years, must be allocated to the Department of Education for the purchase of new school buses./
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 53 (Doc Name COUNCIL\NBD\AMEND\11658AC01), which was tabled:
Amend the bill, as and if amended, in Section 59-150-350(C) of the 1976 Code, as contained in SECTION 2, by striking all after the third sentence in the subsection and inserting: / Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General. Not less than forty-five percent of such proceeds in any year shall be used for higher education purposes in this State and not less than forty-five percent used for K-12 purposes. Any remaining proceeds must be used for the higher education purposes or the K-12 purposes or both that are permitted by this section as the General Assembly shall provide in a separate appropriations bill. The higher education portion in any year shall be used to provide Palmetto Fellows Scholarships to all eligible applicants and then used to provide LIFE Scholarships for eligible resident students attending two-year or four-year public institutions or technical colleges in those amounts provided by law. The K-12 portion in any year shall be split into two parts with the first part used to provide youth education scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations act, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the


Printed Page 3193 . . . . . Thursday, May 3, 2001

lottery proceeds through the Department of Education directly to the school in the name of the attending child.
The remaining part of the K-12 funds shall be allocated equally between providing public school facility support and the maintenance and acquisition of school buses as the General Assembly shall provide by law upon fully funding the above listed items, remaining revenues shall be used for elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences in a separate appropriations act. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 56 (Doc Name COUNCIL\GGS\AMEND\22068MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-150(A) as contained in SECTION 2, second sentence, by deleting / sixty / and inserting / twenty /
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 57 (Doc Name COUNCIL\GGS\AMEND\22069MM01), which was tabled:


Printed Page 3194 . . . . . Thursday, May 3, 2001

Amend the bill, as and if amended, Section 59-150-230(I) as contained in SECTION 2, by deleting in its entirety and inserting:
/   (I)   Unclaimed prize money must be deposited in the Education Lottery Account each year. At least one percent of the unclaimed prize money in the Education Lottery Account must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years to the South Carolina Department of Alcohol and Other Drug Abuse Services for the treatment of compulsive gambling disorder and educational programs related to that disorder, including a gambling hotline. If unclaimed prize money does not amount to at least five hundred thousand dollars in any one year of operation, the commission shall provide the Education Lottery Account, through the operating funds of the commission, the monies for DAODAS for the provision of those services, in an amount equal to the difference between the unclaimed prize monies and at least five hundred thousand dollars; except that the amount of funding for DAODAS, at least five hundred thousand dollars, must be allocated by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years. The Director of the DAODAS shall report to the board on the programs implemented with these funds, and provide a copy of the report to the General Assembly. /
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 58 (Doc Name COUNCIL\GGS\AMEND\22070CM01), which was tabled:
Amend the bill, as and if amended, by striking Section 59-150-210(D) as contained in SECTION 2, and inserting:
/   (D)   A lottery ticket or share may not be sold on the date of any general elections; within three hundred feet of a church, school, or playground, as provided in Section 59-150-150(B)(2)(i); to a lottery game other than that defined in Section 59-150-20(7); to a lottery game with corporate sponsorship; or in a full-service grocery store or supermarket. /
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.


Printed Page 3195 . . . . . Thursday, May 3, 2001

Rep. JENNINGS proposed the following Amendment No. 59 (Doc Name COUNCIL\GGS\AMEND\22071CM01), which was tabled:
Amend the bill, as and if amended, by striking Section 59-150-100(D) and inserting:
/   (D)   Notwithstanding any other provision of law, an employee of the commission who leaves his employment may not represent a lottery vendor or lottery retailer before the commission for a period of five years following termination of employment with the commission. /
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 60 (Doc Name COUNCIL\GJK\AMEND\20620AC01), which was tabled:
Amend the bill, as and if amended, in Section 59-150-190(B) by deleting the first sentence and inserting:

/The commission may require a lottery retailer to place all lottery proceeds due the commission in accounts in institutions insured by the Federal Deposit Insurance Corporation (FDIC) no later than the close of the next banking day after the date of their collection by the lottery retailer until the date they are paid over to the commission. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 61 (Doc Name COUNCIL\GJK\AMEND\20618SD01), which was tabled:
Amend the bill, as and if amended, in Section 59-150-210(D) of the 1976 Code, as contained in SECTION 2, by adding after /elections;/ on line 2 of the subsection / between the hours of 12:00 midnight on Saturday and 12:00 midnight on Sunday;/
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.


Printed Page 3196 . . . . . Thursday, May 3, 2001

Rep. JENNINGS proposed the following Amendment No. 62 (Doc Name COUNCIL\GJK\AMEND\20615SD01), which was tabled:
Amend the bill, as and if amended, by striking SECTION 13 and inserting:
/SECTION   13.   This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 63 (Doc Name COUNCIL\GJK\AMEND\20616SD01), which was tabled:
Amend the bill, as and if amended, in Section 59-150-10 of the 1976 Code, as contained in SECTION 2, by striking /Education/ on line 2.
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 65 (Doc Name COUNCIL\GJK\AMEND\20619SD01), which was tabled:
Amend the bill, as and if amended, in Section 59-150-350(C) of the 1976 Code, as contained in SECTION 2, by striking all after the third sentence in the subsection and inserting: / Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General. Not less than forty-five percent of such proceeds in any year shall be used for higher education purposes in this State and not less than forty-five percent used for K-12 purposes. Any remaining proceeds must be used for the higher education purposes or the K-12 purposes or both that are permitted by this section as the General Assembly shall provide. The higher education portion in any year shall be used to provide LIFE Scholarships for eligible resident students attending two-year or four-year public institutions or technical colleges in those amounts provided by law. The K-12 portion in any year shall be split into two parts with the first part used to provide youth education scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations act, to resident


Printed Page 3197 . . . . . Thursday, May 3, 2001

parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child.
The remaining part of the K-12 funds shall be allocated equally between providing public school facility support and the maintenance and acquisition of school buses as the General Assembly shall provide by law. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 66 (Doc Name COUNCIL\GJK\AMEND\20621SD01), which was tabled:
Amend the bill, as and if amended, in Section 59-150-350(C) of the 1976 Code, as contained in SECTION 2, by striking all after the third sentence in the subsection and inserting: / Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General. One-half of such proceeds in any year shall be used for higher education purposes in this State and one-half used for K-12 purposes. The higher education portion in any year shall be used to provide LIFE Scholarships for eligible resident students attending two-year or four-year public institutions or technical colleges in those amounts provided by law. The remaining one-half of the proceeds in any year for K-12 purposes shall be split into two parts with the first part used to provide youth education scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations act, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship


Printed Page 3198 . . . . . Thursday, May 3, 2001

is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child.
The remaining part of the K-12 funds shall be allocated equally between providing public school facility support and the maintenance and acquisition of school buses as the General Assembly shall provide by law. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.
Renumber sections to conform.
Amend totals and title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Rep. JENNINGS proposed the following Amendment No. 48 (Doc Name COUNCIL\SWB\AMEND\5460DJC01), which was rejected:
Amend the bill, as and if amended, Section 59-149-50 as contained in SECTION 2, by striking subsection (e) in its entirety and inserting:
/ (E)   Notwithstanding the provisions of this section and the other requirements of this chapter, beginning with school year 2002-2003, students attending a two-year college of this State taking not less than six credit hours per term (Fall, Spring, Summer) or eighteen credit hours of instruction a year but less than thirty credit hours a year who are otherwise eligible for a LIFE scholarship shall receive a LIFE scholarship equal to one-half the amount that eligible students receive at the two-year college who take at least thirty credit hours of instruction a year. To be eligible, two-year college students must have graduated in the top fifty percent of their high school graduating class or have a GPA of 2.5 or higher. Continuing eligibility requirements are that students meet all general eligibility requirements and earn a minimum of six credit hours per term (Fall, Spring, Summer) for a total of eighteen credit hours per year and earn a 2.5 grade point average by the end of the year. /


Printed Page 3199 . . . . . Thursday, May 3, 2001

Renumber sections to conform.
Amend totals and title to conform.

Rep. BALES explained the amendment.

Rep. HARRELL moved to table the amendment, which was rejected by a division vote of 25 to 34.

The question then recurred to the adoption of the amendment.

Rep. HARRELL demanded the yeas and nays which were taken, resulting as follows:

Yeas 48; Nays 63

Those who voted in the affirmative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, G.              Brown, R.              Carnell
Clyburn                Cobb-Hunter            Coleman
Emory                  Freeman                Gourdine
Govan                  Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Howard                 Jennings               Kennedy
Lee                    Littlejohn             Lloyd
Lourie                 Mack                   McLeod
Miller                 Moody-Lawrence         Neal, J.H.
Neal, J.M.             Ott                    Parks
Rhoad                  Rivers                 Rutherford
Scott                  Sheheen                Sinclair
Smith, J.E.            Snow                   Stille
Stuart                 Walker                 Weeks

Total--48

Those who voted in the negative are:

Allison                Altman                 Barrett
Bingham                Campsen                Cato
Chellis                Coates                 Cooper
Cotty                  Delleney               Easterday
Edge                   Fleming                Frye
Gilham                 Hamilton               Harrell

Printed Page 3200 . . . . . Thursday, May 3, 2001

Harrison               Hinson                 Huggins
Keegan                 Kelley                 Kirsh
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Loftis                 Lucas                  Martin
McCraw                 McGee                  Merrill
Owens                  Perry                  Quinn
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough
Sharpe                 Simrill                Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Talley                 Taylor                 Thompson
Townsend               Tripp                  Trotter
Vaughn                 Webb                   White
Wilkins                Young, A.              Young, J.

Total--63

So, the amendment was rejected.

Rep. JENNINGS proposed the following Amendment No. 51 (Doc Name COUNCIL\NBD\AMEND\11660AC01), which was tabled:
Amend the bill, as and if amended, by inserting a new SECTION after SECTION 4 to read:
/ SECTION   4.A.(1)   Section 59-149-50(B) of the 1976 code is amended to read:

"(B)   Students receiving a LIFE Scholarship to retain it and students currently enrolled in an eligible institution to receive such a scholarship must earn a 2.5 cumulative grade point average on a 4.0 scale for the first thirty hours and a 3.0 cumulative grade point average on a 4.0 scale each successive year and earn at least thirty credit hours each year for the maximum of semesters permitted at that institution by Section 59-149-60."

(2)   Notwithstanding the general effective date of this act, this section is effective beginning with the 2002-2003 academic year. /
Renumber sections to conform.
Amend title to conform.

Rep. LOURIE explained the amendment.

Rep. HARRELL moved to table the amendment.


Printed Page 3201 . . . . . Thursday, May 3, 2001

Rep. MCLEOD demanded the yeas and nays which were taken, resulting as follows:

Yeas 55; Nays 49

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Campsen                Cato                   Chellis
Coates                 Cotty                  Dantzler
Easterday              Edge                   Fleming
Frye                   Hamilton               Harrell
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Kirsh
Klauber                Law                    Leach
Limehouse              Loftis                 Lucas
McGee                  Merrill                Owens
Perry                  Quinn                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Simrill                Smith, D.C.            Smith, J.R.
Smith, W.D.            Stille                 Talley
Taylor                 Townsend               Trotter
Vaughn                 Walker                 Webb
White                  Wilkins                Young, A.
Young, J.

Total--55

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, G.              Brown, R.              Carnell
Clyburn                Cobb-Hunter            Coleman
Davenport              Delleney               Emory
Freeman                Gourdine               Govan
Harrison               Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Howard                 Jennings               Kennedy
Lee                    Littlejohn             Lloyd
Lourie                 Mack                   McCraw
McLeod                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott

Printed Page 3202 . . . . . Thursday, May 3, 2001

Parks                  Rivers                 Rutherford
Sheheen                Smith, G.M.            Smith, J.E.
Stuart                 Thompson               Weeks
Wilder

Total--49

So, the amendment was tabled.

Rep. JENNINGS proposed the following Amendment No. 54 (Doc Name COUNCIL\NBD\AMEND\11659AC01), which was rejected:
Amend the bill, as and if amended, by deleting Section 59-149-50(E) and inserting:
/(E)   Notwithstanding the provisions of this section and the other requirements of this chapter, beginning with school year 2002-2003, students attending a technical college of this State taking not less than twelve credit hours of instruction a year but less than thirty credit hours a year who are otherwise eligible for a LIFE scholarship shall receive a LIFE scholarship equal to one-third the amount that eligible students receive at the technical college who take at least thirty credit hours of instruction a year."

SECTION   5.   The 1976 Code is amended by adding:/
Renumber sections to conform.
Amend totals and title to conform.

Rep. STUART explained the amendment.

Rep. KELLEY moved to table the amendment.

Rep. STUART demanded the yeas and nays which were taken, resulting as follows:

Yeas 50; Nays 53

Those who voted in the affirmative are:

Allison                Barrett                Campsen
Cato                   Chellis                Cooper
Cotty                  Dantzler               Delleney
Easterday              Edge                   Gilham
Harrell                Harrison               Hinson
Keegan                 Kelley                 Kirsh
Klauber                Koon                   Law

Printed Page 3203 . . . . . Thursday, May 3, 2001

Leach                  Limehouse              Loftis
Lucas                  Martin                 Merrill
Owens                  Perry                  Quinn
Rice                   Riser                  Robinson
Sandifer               Scarborough            Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Stille                 Talley                 Taylor
Thompson               Townsend               Tripp
Walker                 White                  Wilkins
Young, A.              Young, J.

Total--50

Those who voted in the negative are:

Allen                  Askins                 Battle
Bingham                Bowers                 Breeland
Brown, G.              Clyburn                Coates
Cobb-Hunter            Coleman                Davenport
Freeman                Frye                   Gourdine
Govan                  Harvin                 Haskins
Hayes                  Hines, J.              Hines, M.
Hosey                  Jennings               Kennedy
Knotts                 Lee                    Littlejohn
Lloyd                  Lourie                 Mack
McCraw                 McGee                  McLeod
Miller                 Moody-Lawrence         Neal, J.H.
Ott                    Parks                  Phillips
Rodgers                Rutherford             Scott
Sheheen                Simrill                Smith, F.N.
Smith, J.E.            Snow                   Stuart
Vaughn                 Webb                   Weeks
Whatley                Wilder

Total--53

So, the House refused to table the amendment.

Rep. HARRELL spoke against the amendment.
Rep. STUART spoke in favor of the amendment.
Rep. HARRELL spoke against the amendment.


Printed Page 3204 . . . . . Thursday, May 3, 2001

The question then recurred to the adoption of the amendment.

Rep. HARRELL demanded the yeas and nays which were taken, resulting as follows:

Yeas 46; Nays 58

Those who voted in the affirmative are:

Allen                  Askins                 Bales
Bowers                 Breeland               Brown, G.
Clyburn                Cobb-Hunter            Coleman
Davenport              Emory                  Freeman
Gourdine               Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Jennings               Kennedy                Lee
Littlejohn             Lloyd                  Lourie
Mack                   McLeod                 Miller
Moody-Lawrence         Neal, J.H.             Ott
Parks                  Phillips               Rhoad
Rivers                 Scott                  Sheheen
Simrill                Smith, F.N.            Smith, J.E.
Snow                   Stuart                 Vaughn
Webb                   Weeks                  Whatley
Wilder

Total--46

Those who voted in the negative are:

Allison                Altman                 Barrett
Campsen                Cato                   Chellis
Cooper                 Cotty                  Dantzler
Delleney               Easterday              Edge
Fleming                Gilham                 Govan
Harrell                Harrison               Hinson
Keegan                 Kelley                 Kirsh
Klauber                Koon                   Law
Leach                  Limehouse              Loftis
Lucas                  Martin                 McCraw
McGee                  Merrill                Owens
Perry                  Quinn                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe

Printed Page 3205 . . . . . Thursday, May 3, 2001

Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Stille                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Walker
White                  Wilkins                Young, A.
Young, J.

Total--58

So, the amendment was rejected.

Rep. JENNINGS proposed the following Amendment No. 55 (Doc Name COUNCIL\DKA\AMEND\4438MM01), which was tabled:
Amend the bill, as and if amended, SECTION 1, by deleting item (5) in its entirety.
Amend further, Section 59-150-90(A), SECTION 2, by deleting the subsection and inserting:
/ (A)   The executive director of the commission shall direct and supervise all administrative and technical activities as provided by this chapter and by the regulations promulgated and policies and procedures adopted by the commission. It is the duty of the executive director to:

(1)   oversee the initiation, supervision, and administration of the operation of the lottery games;

(2)   employ and direct necessary personnel;

(3)   employ by contract and compensate necessary persons and firms;

(4)   promote or provide for promotion of the lottery and functions related to the commission;

(5)   prepare a budget for the approval of the commission;

(6)   require bond from retailers and vendors in amounts required by the commission;

(7)   report quarterly to the board with a full and complete statement of lottery revenues and expenses for the preceding quarter; and

(8)   perform other duties generally associated with an executive director of a commission of an entrepreneurial nature. /
Amend further by inserting:
/ Section 59-150-335.   (A)(1)   All lottery proceeds are the property of the commission.


Printed Page 3206 . . . . . Thursday, May 3, 2001

(2)   From its lottery proceeds, the commission shall pay the operating expenses of the commission. Approximately fifty percent of the amount of money from the actual sale of lottery game tickets or shares must be made available as prize money, except that this item does not create any lien, entitlement, cause of action, or other private right, and rights of holders of lottery games tickets or shares must be determined by the commission in setting the terms of its lottery or lotteries.

(B)(1)   On or before the twentieth day of each month, the commission shall transfer to the Education Lottery Account, the amount of all net proceeds during the preceding month. The State Treasurer shall account separately for net proceeds by establishing and maintaining a Education Lottery Account. These proceeds may not be commingled with any other funds.

(2)   Upon their deposit with the State, monies representing a deposit of net proceeds become the unencumbered property of the State of South Carolina and the commission may not agree or undertake otherwise. The monies may be invested by the State Treasurer pursuant to state investment practices. All earnings attributable to the investments are also the unencumbered property of the State and accrue to the credit of the Education Lottery Account.

(3)(a)   A reserve account must be maintained within the Education Lottery Account. The amount of the reserve account must equal ten percent of the total amount of lottery proceeds deposited into the Education Lottery Account for the preceding fiscal year. For the first twelve months of operation, ten percent of the lottery proceeds received by the State must be credited to the reserve account. After the end of the first complete fiscal year, the reserve account must be maintained at the ten percent level.

(b)   If the reserve account is drawn upon during the fiscal year, the account must be brought back to the appropriate level during the following fiscal year.

(c)   The reserve account may only be drawn upon if the net proceeds are insufficient to meet the required funding for the scholarships as provided in Section 59-150-350.

(C)(1)   Pursuant to Section 11-9-880, the Board of Economic Advisors, in conjunction with the commission, shall provide to the General Assembly, in a separate estimate, the amount of projected net lottery proceeds for the upcoming fiscal year. The State Treasurer's Office shall estimate the annual interest earnings from commission


Printed Page 3207 . . . . . Thursday, May 3, 2001

funds. All interest earnings and other net proceeds must be used for educational purposes and programs.

(2)   Appropriations from the Education Lottery Account must be for educational purposes and programs only as defined in Section 59-150-350. These appropriations must be used to supplement and not supplant existing funds used for education.

(3)   If expenditures for particular educational purposes or programs as defined in this chapter are less than the amounts appropriated, the excess may be retained in the account and expended the following fiscal year for those particular purposes or programs.

(D)(1)   A deficiency in the Education Lottery Account may not be replenished by book entries reducing a nonlottery reserve of general funds including specifically, but without limitation, the General Reserve Fund or the Capital Reserve Fund.

(2)   A surplus in the Education Lottery Account may not be reduced to correct nonlottery deficiencies in sums available for general appropriations, and a surplus in the Education Lottery Account may not be included in a surplus calculated for setting aside a nonlottery reserve, specifically, without limitation, the General Reserve Fund or the Capital Reserve Fund. /
Amend further by deleting Section 59-150-340, SECTION 2, and inserting:
/ Section 59-150-340.   The net proceeds received from the state lottery for education as provided by law must be deposited by the State Treasurer in a fund separate and distinct from the state general fund entitled the 'Education Lottery Account'. All interest or income earned by the fund must be retained in the account and used for its stated purposes. However, all revenue received by the Education Lottery Account in any fiscal year together with earnings on it for that year must be disbursed as required by Section 59-150-350. It is the intent of the General Assembly in creating this Education Lottery Account that its funds be managed so as to establish and fund these programs permanently. Upon receipt of monies transferred to the Education Lottery Account by the State Treasurer, these monies must be appropriated to the programs and for the purposes stipulated in Section 59-150-350 in priority order with the programs ranked in higher order being fully funded first before other programs in lesser order are funded to any degree. The Comptroller General shall record these revenues received on a cash basis and disbursements for the purposes provided also must be on a cash basis; except, that unexpended funds at the end of a fiscal year after disbursement to the programs authorized


Printed Page 3208 . . . . . Thursday, May 3, 2001

to receive the funds as provided in Section 59-150-350 may be carried forward to future years and expended for the same purposes. /
Amend further by deleting Section 59-150-350, SECTION 2, and inserting:
/ Section 59-150-350.   (A)   There is appropriated for the following purposes and programs annually from the Education Lottery Account in priority order on a fiscal year basis beginning with fiscal year 2002-2003 the amounts indicated as provided in this section. Notwithstanding any other provision of law, no distribution may be made from the Education Lottery Account until net proceeds in the account exceed thirty-five million dollars.

(B)   The first one hundred million dollars in the Education Lottery Account must be appropriated as follows:

(1)   fifty percent to the Commission on Higher Education for free tuition at state technical colleges and two-year public institutions as provided in Section 59-150-360 of this chapter. Lottery tuition assistance at independent two-year institutions must be the same as the maximum in-state tuition rate at a two-year public institution;

(2)   forty percent for the SC HOPE Scholarship Program established pursuant to Section 59-150-370 of this chapter; however, from these funds, the University of South Carolina-Aiken and the University of South Carolina-Spartanburg must be reimbursed the total cost of tuition for those students enrolled in the associate degree nursing program; this amount is in lieu of HOPE scholarships for those eligible students. The Commission on Higher Education may use up to one hundred thirty thousand dollars of these funds to help defray its expenses incurred in the performance of its duties pursuant to this chapter;

(3)   nine percent to the Department of Education to be allocated to K-12 school technology;

(4)   one percent to the State Library for public library state aid.

(C)   After the items provided in subsection (B) are funded, the remaining proceeds in the Lottery Education Account are appropriated as follows:

(1)   thirty percent to the Commission on Higher Education for state technical colleges and two-year public institutions for an "institutional impact fee" to mitigate the impact of increased enrollment at these colleges and institutions as a result of the provision of free tuition;

(2)   forty percent to the Commission on Higher Education for higher education assistance, including twenty percent for need-based


Printed Page 3209 . . . . . Thursday, May 3, 2001

grants, eight percent for tuition grants, eight percent for grants to teachers for advanced education with priority to annual grants earmarked for teachers working toward their masters' degree or advanced education in their areas of certification, or both, and four percent for the National Guard Tuition Repayment Program; a portion of the needs-based grants generated by the South Carolina Education Lottery must be designated to help off-set the cost of attendance of Pell Grant recipients at two-year public institutions; funding shall not be allocated to institutions to cover the cost of tuition for a student to the extent that a student's tuition is paid by other grants, scholarships, or other financial aid. A student must not receive reduced financial aid as a result of the implementation of this section;

(3)   twenty-seven percent to the Department of Education to be allocated K-12 school technology;

(4)   three percent to the State Library for public library state aid.

(D)   Distributions must be made from the Education Lottery Account on a quarterly basis by the last day of January, April, July, and October of each year, beginning in July 2002. Any net proceeds received during fiscal year 2001-2002 must be carried forward for distribution in fiscal year 2002-2003. This distribution schedule may be adjusted during the lottery's first and second year of operation as revenue permits. The State Treasurer must distribute all available funds in the Education Lottery Account each quarter to the programs or for the purposes indicated in subsections (B) and (C). /
Amend further by inserting at the end of SECTION 2:
/ Section 59-150-360.   (A)   SC HOPE Scholarships are hereby established and are provided by the State. These scholarships cover the cost of attendance, as defined by the Commission on Higher Education by regulation, up to a maximum of two thousand dollars per year, except as provided in item (2) of this subsection, to eligible resident students attending four-year public and independent institutions as defined in subsection (B),

(B)   For purposes of this chapter, a 'public or independent institution' which a student may attend to receive an SC HOPE Scholarship includes the following:

(1)   a South Carolina four-year public institution as defined in Section 59-103-5 and a four-year independent institution as defined in Section 59-113-50;

(2)   a public or independent bachelor's level institution chartered before 1962 whose major campus and headquarters are


Printed Page 3210 . . . . . Thursday, May 3, 2001

located within South Carolina; or an independent bachelor's level institution which is accredited by the Southern Association of Colleges and Secondary Schools; or an independent bachelor's level institution which is accredited by the New England Association of Colleges and Schools. Institutions whose sole purpose is religious or theological training, or the granting of professional degrees do not meet the definition of 'public or independent institution' for purposes of this chapter.

(C)   A student is eligible to receive and maintain a SC HOPE Scholarship if he meets the criteria for receiving and maintaining the Legislative Incentives for Future Excellence (LIFE) Scholarship; except that a minimum Scholastic Aptitude Test or ACT score is not required for eligibility for the SC HOPE Scholarship. These SC HOPE Scholarships must be granted and awarded as provided in this section.

(D)   A student receiving a LIFE or Palmetto Fellows Scholarship must also receive an SC HOPE Scholarship pursuant to this section.

(E)   These SC HOPE Scholarships in combination with all other grants and scholarships must not exceed the cost of attendance at the particular institutions referenced in subsection (B).

(F)   The Commission on Higher Education must promulgate regulations and establish procedures to administer the provisions of this section. In addition, the commission must ensure accountability for the scholarship by monitoring the distribution of grades at the institutions that receive these scholarship funds.

(G)   All institutions participating in the SC HOPE Scholarship Program must report their enrollment and other relevant data as solicited by the Commission on Higher Education which may audit these institutions to ensure compliance with this provision.

(H)   If there are insufficient funds in the Education Lottery Account to provide full two thousand dollar scholarships to each eligible recipient for any particular year, the amount of each eligible recipient's scholarship must be reduced on a pro rata basis for that year as necessary to reflect the funds available.

Section 59-150-370.   The State Department of Education, in consultation with the Budget and Control Board's Office of Information Resources, the State Library, and the Education Television Commission, shall administer primary and secondary technology funding provided for in Section 59-150-350(B)(3) and (C)(3). These funds are intended to provide technology connectivity, hardware, software, and training for the K-12 public schools throughout the State and, to the maximum extent possible, involve public-private sector


Printed Page 3211 . . . . . Thursday, May 3, 2001

collaborative efforts. Funds allocated to the local school districts for technology expenditures must be distributed based on the number of students eligible for the free and reduced lunch program in grades 1-3. /
Amend further by deleting SECTION 8 and inserting:
/ SECTION 8.   Provisions of this chapter relating to guidelines for the appropriation of lottery proceeds must not be amended in a general appropriations act, but only in a separate piece of legislation solely for that purpose and by a majority vote of those present and voting in both houses of the General Assembly. /
Amend further by deleting SECTIONS 3, 4, and 12 in their entirety.
Renumber items and reletter subsections to conform.
Amend title to conform.

Rep. JENNINGS explained the amendment.

Rep. KELLEY moved to table the amendment.

Rep. JENNINGS demanded the yeas and nays which were taken, resulting as follows:

Yeas 67; Nays 45

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Bingham                Campsen                Cato
Chellis                Coates                 Cooper
Cotty                  Dantzler               Davenport
Delleney               Easterday              Edge
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Klauber
Knotts                 Koon                   Law
Leach                  Limehouse              Loftis
Lucas                  Martin                 McGee
Merrill                Owens                  Perry
Quinn                  Rice                   Riser
Robinson               Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Smith, W.D.            Stille
Stuart                 Talley                 Taylor

Printed Page 3212 . . . . . Thursday, May 3, 2001

Thompson               Townsend               Tripp
Trotter                Vaughn                 Webb
White                  Wilkins                Young, A.
Young, J.

Total--67

Those who voted in the negative are:

Askins                 Bowers                 Breeland
Brown, G.              Brown, R.              Carnell
Clyburn                Cobb-Hunter            Coleman
Emory                  Freeman                Gourdine
Govan                  Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Howard                 Jennings               Kennedy
Kirsh                  Lee                    Littlejohn
Lloyd                  Lourie                 Mack
McCraw                 McLeod                 Miller
Moody-Lawrence         Neal, J.H.             Neal, J.M.
Ott                    Parks                  Rhoad
Rivers                 Rutherford             Scott
Smith, F.N.            Smith, J.E.            Weeks
Whatley                Whipper                Wilder

Total--45

So, the amendment was tabled.

Rep. JENNINGS proposed the following Amendment No. 64 (Doc Name COUNCIL\GJK\AMEND\20614AC01), which was tabled:
Amend the bill, as and if amended, by deleting Section 59-150-30 and inserting:

/ Section 59-150-30.   (A)   There is created a commission to be known as the South Carolina Lottery Commission, which is deemed to be a public commission and an instrumentality of the State. The commission and its employees are subject to the South Carolina Consolidated Procurement Code, South Carolina Ethics Reform Act, and South Carolina Freedom of Information Act. Venue for the commission is in Richland County.

(B)   Beginning in December 2004 and every three years after that, or by legislative request, the Legislative Audit Council shall conduct a


Printed Page 3213 . . . . . Thursday, May 3, 2001

management performance audit of the commission. The cost of this audit, up to one hundred thousand dollars, is an operating expense of the commission. The commission shall pay directly to the Legislative Audit Council the cost of the management performance audit. /
Amend further, as and if amended, by deleting Section 59-150-50 and inserting:

/Section 59-150-50.   The board shall:

(1)   approve, disapprove, amend, or modify the budget recommended by the chief executive officer for the operation of the commission;

(2)   approve, disapprove, amend, or modify the terms of procurements recommended by the chief executive officer;

(3)   hear appeals of hearings required by this chapter;

(4)   promulgate regulations and adopt policies and procedures relating to the conduct of lottery games and as specified in Section 59-150-70; and

(5)   perform functions ordinarily and customarily performed by boards corporate and politic so long as they are not inconsistent with the requirements of this chapter. /
Amend further, as and if amended, by deleting Section 59-159-60(A)(19) and inserting:

/(19)   promulgate regulations and adopt and amend policies and procedures necessary to carry out and implement its powers and duties, organize and operate the corporation, regulate the conduct of lottery games in general, and other matters necessary or desirable for the efficient and effective operation of the lottery or the convenience of the public; /
Amend further, as and if amended, in Section 59-150-60 by deleting subsections (G) and (H) and inserting:

/(G)   The commission may not give away tickets for promotional purposes. /
Amend further, as and if amended, by deleting Section 59-150-70 and inserting:

/Section 59-150-70.   The board may promulgate regulations and adopt policies and procedures regulating the conduct of lottery games in general including, but not limited to, regulations, policies, and procedures specifying the:

(1)   type of lottery games as described in Section 59-150-20(7). The lottery games may include the selling of lottery game tickets or shares or the use of electronic or mechanical devices, except those electronic or mechanical devices prohibited by Section 59-150-20(7);


Printed Page 3214 . . . . . Thursday, May 3, 2001

(2)   sale price of lottery game tickets or shares and the manner of sale, except that all sales must be for cash or debit card only. Payment by checks, credit cards, charge cards, or other form of deferred payment is prohibited;

(3)   number and amount of prizes;

(4)   method and location of selecting or validating winning lottery game tickets or shares;

(5)   manner and time of payment of prizes, which may include lump sum payments or installments over a period of years;

(6)   manner of payment of prizes by retailers to the holders of a winning lottery game ticket or share including, without limitation, provision for payment of prizes not exceeding six hundred dollars after deducting the price of the lottery game ticket or share and after performing validation procedures appropriate to the game and as specified by the board. The board may provide for a limited number of retailers who may pay prizes of up to five thousand dollars after performing validation procedures appropriate to the game and as specified by the board without regard to where the lottery game ticket or share was purchased;

(7)   frequency of lottery games and drawings or selection of winning lottery game tickets or shares;

(8)   means of conducting drawings;

(9)   method to be used in selling lottery game tickets or shares, which may include the use of electronic or mechanical devices but the devices may be placed only in locations on the premises of the lottery retailer which are within the view of the retailer or his employee;

(10)   manner and amount of compensation to lottery retailers; and

(11)   other matters necessary, desirable, or convenient toward ensuring the efficient and effective operation of lottery games, the continued entertainment and convenience of the public, and the integrity of the lottery. /
Amend further, as and if amended, by deleting Section 59-150-90(A) and inserting:

/(A)   The executive director of the commission shall direct and supervise all administrative and technical activities as provided by this chapter and by the regulations promulgated and policies and procedures adopted by the board. It is the duty of the executive director to:

(1)   oversee the initiation, supervision, and administration of the operation of the lottery games;


Printed Page 3215 . . . . . Thursday, May 3, 2001

(2)   employ and direct necessary personnel;

(3)   employ by contract and compensate necessary persons and firms;

(4)   promote or provide for promotion of the lottery and functions related to the corporation;

(5)   prepare a budget for the approval of the board;

(6)   require bond from retailers and vendors in amounts required by the board;

(7)   report quarterly to the board with a full and complete statement of lottery revenues and expenses for the preceding quarter; and

(8)   perform other duties generally associated with an executive director of an entity. /
Amend further, as and if amended, immediately after Section 59-150-350 by inserting:

/Section 59-150-360.   (A)   There is created as a committee, the South Carolina Education Lottery Oversight Committee, to be composed of twelve members. The members of the committee are appointed as follows: the Speaker of the House of Representatives appoints three members; the President Pro Tempore of the Senate appoints three members; the Chairman of the South Carolina Commission on Higher Education appoints three members; and the Chairman of the South Carolina Education Oversight Committee appoints three members. The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each appoint one co-chairman from the membership of the South Carolina Education Lottery Oversight Committee. The oversight committee periodically shall inquire into and review the operations of the commission, and periodically shall review and evaluate the success with which the authority is accomplishing its statutory duties and functions as provided in this chapter. The oversight committee may conduct an independent audit or investigation of the authority as necessary.

(B)   The commission shall provide the oversight committee, no later than December first of each year, a complete report of the level of participation of minority businesses in all retail and procurement contracts awarded by the commission. /
Amend further, as and if amended, by deleting SECTION 9 in its entirety.
Renumber sections to conform.
Amend title to conform.


Printed Page 3216 . . . . . Thursday, May 3, 2001

Rep. JENNINGS explained the amendment.

Rep. HARRELL moved to table the amendment, which was agreed to.

Rep. ROBINSON proposed the following Amendment No. 69 (Doc Name COUNCIL\DKA\AMEND\4385MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-20(7), SECTION 2, by deleting in the first sentence /instant tickets/.
Amend further, the first paragraph of Section 59-150-70, SECTION 2, by deleting in the fourth sentence / instant tickets, /.
Amend further, the first paragraph of Section 59-150-150(B), SECTION 2, by deleting in the second sentence / instant tickets and on-line a / and inserting / an on-line /.
Amend further, Section 59-150-190(A), SECTION 2, by deleting in the penultimate sentence / unsold instant tickets received by a lottery retailer and /; and by deleting in the last sentence / and unused instant tickets /.
Amend further, by deleting Section 59-150-220 in its entirety and inserting:

/ Section 59-150-220   Reserved. /
Amend further, by deleting Section 59-150-230(C)(5), SECTION 2, and inserting:

/ (5)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter. /
Amend title to conform.

Rep. ROBINSON moved to table the amendment, which was agreed to.

Reps. JENNINGS and SCOTT proposed the following Amendment No. 70 (Doc Name COUNCIL\DKA\AMEND\4395MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-230(C), SECTION 2, by deleting the subsection and inserting:
/ (C)   The commission shall promulgate regulations and adopt policies and procedures to establish a system of verifying the validity


Printed Page 3217 . . . . . Thursday, May 3, 2001

of lottery games tickets or shares claimed to win prizes and to effect payment of prizes.

(1)   A prize, a portion of a prize, or a right of a person to a prize awarded is not assignable except as provided in this section. A prize or a portion of a prize remaining unpaid at the death of a prize winner must be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the commission with a notarized letter of direction from the settlor and no written notice of revocation has been received by the commission before the settlor's death. Following a settlor's death and before payment to a trustee, the commission shall obtain from the trustee a written agreement to indemnify and hold the commission harmless with respect to claims that may be asserted against the commission arising from payment to or through the trust. Notwithstanding any other provisions of this section, a person, pursuant to an appropriate judicial order, may be paid the prize to which a winner is entitled.

(2)   A prize must not be paid if it:

(a)   arises from claimed lottery game tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;

(b)   lacks captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or

(c)   fails to comply with additional specific regulations and public or confidential validation and security tests of the commission appropriate to the particular lottery game involved.

(3)   A particular prize in a lottery game must not be paid more than once, and if more than one person is entitled to a particular prize, the sole remedy of those persons is the award to each of them of an equal share in the prize.

(4)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days, or for a multi-state lottery game within one hundred eighty days, after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter. /
Amend title to conform.


Printed Page 3218 . . . . . Thursday, May 3, 2001

Rep. JENNINGS moved to table the amendment, which was agreed to.

Reps. JENNINGS and SCOTT proposed the following Amendment No. 72 (Doc Name COUNCIL\DKA\AMEND\4395MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-230(C), SECTION 2, by deleting the subsection and inserting:
/ (C)   The commission shall promulgate regulations and adopt policies and procedures to establish a system of verifying the validity of lottery games tickets or shares claimed to win prizes and to effect payment of prizes.

(1)   A prize, a portion of a prize, or a right of a person to a prize awarded is not assignable except as provided in this section. A prize or a portion of a prize remaining unpaid at the death of a prize winner must be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the commission with a notarized letter of direction from the settlor and no written notice of revocation has been received by the commission before the settlor's death. Following a settlor's death and before payment to a trustee, the commission shall obtain from the trustee a written agreement to indemnify and hold the commission harmless with respect to claims that may be asserted against the commission arising from payment to or through the trust. Notwithstanding any other provisions of this section, a person, pursuant to an appropriate judicial order, may be paid the prize to which a winner is entitled.

(2)   A prize must not be paid if it:

(a)   arises from claimed lottery game tickets that are stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;

(b)   lacks captions that conform and agree with the play symbols as appropriate to the particular lottery game involved; or

(c)   fails to comply with additional specific regulations and public or confidential validation and security tests of the commission appropriate to the particular lottery game involved.

(3)   A particular prize in a lottery game must not be paid more than once, and if more than one person is entitled to a particular prize, the sole remedy of those persons is the award to each of them of an equal share in the prize.


Printed Page 3219 . . . . . Thursday, May 3, 2001

(4)   A holder of a winning lottery game ticket or share from a lottery game, multi-state, or multi-sovereign lottery game must claim a cash prize within one hundred eighty days after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days, or for a multi-state lottery game within one hundred eighty days, after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter. /
Amend title to conform.

Rep. JENNINGS moved to table the amendment, which was agreed to.

Reps. OTT, BALES and KNOTTS proposed the following Amendment No. 73 (Doc Name COUNCIL\SWB\AMEND\ 5462DJC01), which was tabled:
Amend the bill, as and if amended, by adding a new SECTION appropriately numbered to read:
/SECTION   ___.   The 1976 Code is amended to read:

"Section 59-149-58.   Notwithstanding any other provision of law, students attending a technical college of this State who are at least twenty-five years of age and who have a 3.0 average on a 4.0 scale after the first semester meet the academic requirements for receiving a life scholarship under this chapter at that technical college." /
Renumber sections to conform.
Amend totals and title to conform.

Rep. OTT moved to table the amendment, which was agreed to.

Rep. PERRY proposed the following Amendment No. 15 (Doc Name COUNCIL\NBD\AMEND\11643AC01), which was adopted:
Amend the bill, as and if amended, Section 59-149-50(D) after the third paragraph by inserting:
/For an exceptionally gifted student who is accepted into college without having attended high school, the Commission on Higher Education shall define alternative criteria for the student to qualify for a LIFE Scholarship./
Renumber sections to conform.
Amend totals and title to conform.


Printed Page 3220 . . . . . Thursday, May 3, 2001

Rep. PERRY explained the amendment.

POINT OF ORDER

Rep. WEEKS raised the Point of Order that Amendment No. 15 was out of order in that it was not germane to the Bill.
SPEAKER WILKINS overruled the Point of Order.

The amendment was then adopted.

Rep. COBB-HUNTER proposed the following Amendment No. 17 (Doc Name COUNCIL\DKA\AMEND\4435MM01), which was tabled:
Amend the bill, as and if amended, Section 59-150-20, SECTION 2, by deleting (4) in its entirety and inserting:

/ (4)   'Educational purposes and programs' means nonrecurring new or supplemental educational expenses and scholarships including, but not limited to, merit based scholarships and need-based grants funding; delivery, upgrade, and maintenance of technology to public schools grades K-12; purchase of public school buses for grades K-12; and delivery and upgrade of public education programs to grades K-12. Scholarships or grants, as defined in this subitem, may be provided only to citizens of this State to enable them to attend only public institutions of higher learning, as defined in Section 59-103-5, and state technical schools and independent institutions of higher learning in this State, as defined in Section 59-113-50. /
Amend further, Section 59-150-320(1), SECTION 2, by deleting item (1) and inserting:

/ (1)   submit quarterly and annual reports to the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the State Auditor, the Comptroller General, the State Treasurer, and the Chairmen of the House Ways and Means Committee and the Senate Finance Committee disclosing the total lottery revenues, prize disbursements, operating expenses, and administrative expenses of the commission during the reporting period. The annual report additionally must describe the organizational structure of the commission, summarize the functions performed by each organizational division within the commission, and contain a detailed budget for the next fiscal year. The quarterly reports must be submitted within fifteen days of the end of the quarter, and the annual report must be submitted by October fifteenth. Both the quarterly and


Printed Page 3221 . . . . . Thursday, May 3, 2001

annual reports must break down lottery revenues and prize disbursements by zip code; / .
Amend further, by deleting Section 59-150-340, SECTION 2, in its entirety and inserting:
/ Section 59-150-340.   The net proceeds received from the state lottery for education as provided by law must be deposited by the State Treasurer in a fund separate and distinct from the state general fund entitled the 'Education Lottery Account'. All interest or income earned by the fund must be retained in the account and used for its stated purposes. However, all revenue received by the Education Lottery Account in any fiscal year together with earnings on it for that year must be disbursed as required by Section 59-150-350. It is the intent of the General Assembly in creating this Education Lottery Account that its funds be managed so as to establish and fund these programs permanently. Upon receipt of monies transferred to the Education Lottery Account by the State Treasurer, these monies must be appropriated to the programs and for the purposes stipulated in Section 59-150-350, in the order and according to the pro rata share of proceeds as designated. The Comptroller General must record these revenues received on a cash basis, and disbursements for the purposes provided also must be on a cash basis; however, unexpended funds at the end of a fiscal year after disbursement to the programs authorized to receive the funds as provided in Section 59-150-350 may be carried forward to future years and expended for the same purposes. /
Amend further, by deleting subsection (C) of Section 59-150-350, SECTION 2, in its entirety and inserting:
/   (C)At the beginning of the first fiscal year after the state lottery becomes operational, the Comptroller General shall certify the amount of net proceeds including investment earnings on the net proceeds credited to and accrued in the Education Lottery Account during the preceding fiscal year. The sum of certified net proceeds and investment earnings must be designated as annual lottery proceeds. Appropriations by the General Assembly in its annual general appropriations bill or any bill appropriating monies for previous or current fiscal years from the Education Lottery Account must be allocated for educational purposes and programs only. Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General and must be allocated so that up to fifty million dollars or fifty percent of the net proceeds, whichever is greater, is used for funding an increase in the base student costs for

Printed Page 3222 . . . . . Thursday, May 3, 2001

elementary and secondary public schools, with funds distributed to a school district according to the wealth-sensitive formula prescribed by the Education Finance Act of 1977, Chapter 20, Title 59; and the remaining fifty percent of net proceeds or the funds remaining, if any, after up to fifty million dollars of net proceeds, are distributed to and used by the Department of Education as follows: thirty percent of the remainder must be allocated for the purchase of public school buses, supplemental to any amounts appropriated for that purpose in the general appropriations act, by supplemental appropriations, or by a statewide bond bill; thirty percent of the remainder must be allocated equally between funding needs-based grants as defined in Chapter 142, Title 59, and tuition grants, as defined in Chapter 113, Title 59, with student eligibility to be determined in both cases, as appropriate, by "need" as defined by Title IV, Student Aid Programs for determining eligibility for federal financial aid for students; and forty percent of the remainder must be allocated for the delivery, upgrade, and maintenance of technology in educational facilities of public elementary and secondary schools. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery. /
Amend title to conform.

Rep. COBB-HUNTER explained the amendment.

Rep. HARRELL moved to table the amendment.

Rep. COBB-HUNTER demanded the yeas and nays which were taken, resulting as follows:

Yeas 65; Nays 51

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Bingham                Campsen                Cato
Chellis                Coates                 Cotty
Dantzler               Davenport              Delleney
Easterday              Edge                   Fleming
Frye                   Gilham                 Harrell

Printed Page 3223 . . . . . Thursday, May 3, 2001

Harrison               Haskins                Hinson
Huggins                Keegan                 Kelley
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McGee                  Merrill
Owens                  Perry                  Quinn
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough
Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   Wilkins
Young, A.              Young, J.

Total--65

Those who voted in the negative are:

Allen                  Askins                 Bales
Battle                 Bowers                 Breeland
Brown, G.              Brown, J.              Brown, R.
Carnell                Clyburn                Cobb-Hunter
Coleman                Cooper                 Emory
Freeman                Gourdine               Harvin
Hayes                  Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Kennedy                Lee                    Lloyd
Lourie                 Mack                   McLeod
Miller                 Moody-Lawrence         Neal, J.H.
Neal, J.M.             Ott                    Parks
Phillips               Rhoad                  Rivers
Rutherford             Scott                  Sheheen
Smith, F.N.            Smith, J.E.            Snow
Stuart                 Weeks                  Whatley
Whipper                White                  Wilder

Total--51

So, the amendment was tabled.


Printed Page 3224 . . . . . Thursday, May 3, 2001

AMENDMENT NO. 25--RECONSIDERED AND ADOPTED

Rep. HARRELL moved to reconsider the vote whereby Amendment No. 25 was rejected.

Rep. LOURIE moved to table the motion to reconsider.

Rep. HARRELL demanded the yeas and nays which were taken, resulting as follows:

Yeas 46; Nays 69

Those who voted in the affirmative are:

Askins                 Bales                  Battle
Bowers                 Breeland               Brown, G.
Brown, J.              Brown, R.              Carnell
Clyburn                Coleman                Cotty
Dantzler               Emory                  Freeman
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.
Howard                 Jennings               Kirsh
Law                    Lee                    Lloyd
Lourie                 Mack                   McCraw
Miller                 Moody-Lawrence         Neal, J.M.
Parks                  Rhoad                  Rivers
Rutherford             Scott                  Smith, F.N.
Smith, J.E.            Snow                   Thompson
Weeks                  Whatley                Whipper
Wilder

Total--46

Those who voted in the negative are:

Allison                Altman                 Barrett
Bingham                Campsen                Cato
Chellis                Coates                 Cobb-Hunter
Cooper                 Davenport              Delleney
Easterday              Edge                   Fleming
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Hinson                 Hosey                  Huggins
Keegan                 Kelley                 Klauber

Printed Page 3225 . . . . . Thursday, May 3, 2001

Knotts                 Koon                   Leach
Limehouse              Littlejohn             Loftis
Lucas                  Martin                 McGee
McLeod                 Merrill                Owens
Perry                  Phillips               Quinn
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough
Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilkins                Young, A.              Young, J.

Total--69

So, the House refused to table the motion to reconsider.

The question then recurred to the motion to reconsider.

Rep. LOURIE demanded the yeas and nays which were taken, resulting as follows:

Yeas 65; Nays 47

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Bingham                Campsen                Cato
Coates                 Cooper                 Davenport
Delleney               Easterday              Edge
Fleming                Freeman                Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Hinson
Huggins                Kelley                 Klauber
Knotts                 Koon                   Leach
Littlejohn             Loftis                 Lucas
Martin                 McGee                  McLeod
Merrill                Miller                 Owens
Perry                  Phillips               Quinn
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough

Printed Page 3226 . . . . . Thursday, May 3, 2001

Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilkins                Young, J.

Total--65

Those who voted in the negative are:

Allen                  Bales                  Battle
Bowers                 Breeland               Brown, G.
Brown, J.              Brown, R.              Carnell
Chellis                Clyburn                Coleman
Cotty                  Dantzler               Emory
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Keegan                 Kirsh                  Law
Lee                    Lloyd                  Lourie
Mack                   McCraw                 Moody-Lawrence
Neal, J.M.             Ott                    Parks
Rivers                 Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Thompson               Weeks                  Whatley
Wilder                 Young, A.

Total--47

So, the motion to reconsider was agreed to.

The question then recurred to the adoption of the amendment.

Rep. J. E. SMITH moved to table the amendment.

Rep. J. E. SMITH demanded the yeas and nays which were taken, resulting as follows:

Yeas 53; Nays 63


Printed Page 3227 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allen                  Askins                 Bales
Barrett                Battle                 Bowers
Breeland               Brown, G.              Brown, R.
Carnell                Chellis                Clyburn
Coleman                Cotty                  Dantzler
Emory                  Gourdine               Govan
Harvin                 Hayes                  Hines, J.
Hines, M.              Hosey                  Howard
Jennings               Keegan                 Kennedy
Kirsh                  Law                    Lee
Lloyd                  Lourie                 Mack
McCraw                 Miller                 Moody-Lawrence
Neal, J.M.             Ott                    Parks
Phillips               Rivers                 Rodgers
Rutherford             Scott                  Smith, F.N.
Smith, J.E.            Snow                   Thompson
Weeks                  Whatley                Whipper
Wilder                 Young, A.

Total--53

Those who voted in the negative are:

Allison                Altman                 Bingham
Campsen                Cato                   Coates
Cooper                 Davenport              Delleney
Easterday              Edge                   Fleming
Freeman                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Kelley                 Klauber                Knotts
Koon                   Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McGee                  McLeod
Merrill                Owens                  Perry
Quinn                  Rice                   Riser
Robinson               Sandifer               Scarborough
Sharpe                 Sheheen                Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Smith, W.D.            Stille
Stuart                 Talley                 Taylor

Printed Page 3228 . . . . . Thursday, May 3, 2001

Townsend               Tripp                  Trotter
Vaughn                 Walker                 Webb
White                  Wilkins                Young, J.

Total--63

So, the House refused to table the amendment.

Rep. J. E. SMITH spoke against the amendment.

SPEAKER PRO TEMPORE IN CHAIR

Rep. F. N. SMITH spoke against the amendment.
Rep. CAMPSEN spoke in favor of the amendment.
Rep. LOURIE spoke against the amendment.
Rep. SIMRILL spoke in favor of the amendment.
Rep. RODGERS spoke in favor of the amendment.

SPEAKER IN CHAIR

The question then recurred to the adoption of the amendment.

Rep. SCOTT demanded the yeas and nays which were taken, resulting as follows:

Yeas 61; Nays 56

Those who voted in the affirmative are:

Allison                Altman                 Bingham
Campsen                Cato                   Coates
Cooper                 Davenport              Delleney
Easterday              Fleming                Freeman
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Huggins                Klauber                Knotts
Koon                   Leach                  Lee
Limehouse              Littlejohn             Loftis
Lucas                  Martin                 McGee
McLeod                 Merrill                Owens
Perry                  Phillips               Quinn
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough

Printed Page 3229 . . . . . Thursday, May 3, 2001

Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   Wilkins
Young, J.

Total--61

Those who voted in the negative are:

Allen                  Askins                 Bales
Barrett                Battle                 Bowers
Breeland               Brown, G.              Brown, J.
Brown, R.              Carnell                Chellis
Clyburn                Cobb-Hunter            Coleman
Cotty                  Dantzler               Edge
Emory                  Gourdine               Harvin
Hayes                  Hines, J.              Hines, M.
Hinson                 Hosey                  Howard
Jennings               Keegan                 Kelley
Kirsh                  Law                    Lloyd
Lourie                 Mack                   McCraw
Miller                 Moody-Lawrence         Neal, J.H.
Neal, J.M.             Ott                    Parks
Rhoad                  Rivers                 Rutherford
Scott                  Sheheen                Smith, F.N.
Smith, J.E.            Snow                   Thompson
Weeks                  Whatley                White
Wilder                 Young, A.

Total--56

So, the amendment was adopted.

Rep. SCOTT spoke against the Bill.

ACTING SPEAKER CATO IN CHAIR

Rep. SCOTT continued speaking.
Rep. RUTHERFORD spoke against the Bill.


Printed Page 3230 . . . . . Thursday, May 3, 2001

Rep. COBB-HUNTER spoke against the Bill.

SPEAKER IN CHAIR

Rep. KENNEDY spoke against the Bill.
Rep. RIVERS spoke against the Bill.
Rep. HOWARD spoke against the Bill.
Rep. KNOTTS spoke in favor of the Bill.
Rep. JENNINGS spoke against the Bill.
Rep. MACK spoke against the Bill.
Rep. J. H. NEAL spoke against the Bill.
Rep. SIMRILL spoke in favor of the Bill.

The question then recurred to the passage of the Bill, as amended, on second reading.

Rep. J. E. SMITH demanded the yeas and nays which were taken, resulting as follows:

Yeas 63; Nays 55

Those who voted in the affirmative are:

Allison                Altman                 Bingham
Campsen                Carnell                Chellis
Coates                 Cotty                  Dantzler
Easterday              Edge                   Fleming
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Hinson                 Huggins                Keegan
Kelley                 Klauber                Knotts
Law                    Leach                  Limehouse
Littlejohn             Lucas                  Martin
McGee                  Merrill                Owens
Perry                  Quinn                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Stille                 Stuart                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Walker

Printed Page 3231 . . . . . Thursday, May 3, 2001

Webb                   White                  Wilder
Wilkins                Young, A.              Young, J.

Total--63

Those who voted in the negative are:

Allen                  Askins                 Bales
Barrett                Battle                 Bowers
Breeland               Brown, G.              Brown, R.
Cato                   Clyburn                Cobb-Hunter
Coleman                Cooper                 Davenport
Delleney               Emory                  Freeman
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.
Hosey                  Howard                 Jennings
Kennedy                Kirsh                  Koon
Lee                    Lloyd                  Loftis
Lourie                 Mack                   McCraw
McLeod                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Parks                  Phillips               Rhoad
Rivers                 Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Snow                   Weeks                  Whatley
Whipper

Total--55

So, the Bill, as amended, was read the second time and ordered to third reading.

S. 496-RECORD FOR VOTING

After much internal struggle and deliberation, I voted to adopt Senate Bill 496 as amended, because procedurally I thought this was necessary to make the lottery a tightly regulated industry. The vote today was a procedural game played by the liberals who want a loose free-for-all lottery. I have always voted against the lottery because I think it is bad public policy for our State that will hurt our citizens. I have fought the referendum change to the constitution as well as voting against ratification. However, the vote today was not about adopting a lottery which I do not support, but whether we would have a tightly


Printed Page 3232 . . . . . Thursday, May 3, 2001

regulated Bill controlling this industry. I do not support a State run lottery, but if we are going to have a lottery, I think it should be controlled by our State, not an outside business skimming millions of dollars off the top. This version adopts language that strongly controls the lottery (not as tightly as I would like it but better than what the Governor or Senate proposed) and therefore, I deemed it better to adopt this Bill than vote against it. A vote against this Bill would not keep the lottery out of South Carolina; if it could have, I would have voted against it.

Rep. Mike Easterday         Rep. Glenn Hamilton

RECORD FOR VOTING

After much internal struggle and deliberation, I voted against the lottery bill, H. 3307, Wednesday, May 2, 2001. The vote on Thursday was a procedural game played by the liberals who want a loose free-for-all lottery. I have always voted against the lottery because I think it is bad public policy for our State that will hurt our citizens. I have fought the referendum change to the constitution as well as voting against ratification. However, the vote today was not about adopting a lottery which I do not support, but whether we would have a tightly regulated Bill controlling this industry. I do not support a State run lottery, but if we are going to have a lottery, I think it should be controlled by our State, not an outside business skimming millions of dollars off the top. This version adopts language that strongly controls the lottery (not as tightly as I would like it but better than what the Governor or Senate proposed) and therefore, I deemed it better to adopt this Bill than vote against it. A vote against this Bill would not keep the lottery out of South Carolina; if it could have, I would have voted against it. These amendments are very restrictive, and I was able to introduce legislation which eliminates power-ball, video poker lottery games, and multi-state lottery promotions.

Rep. Bob Leach

STATEMENT FOR THE JOURNAL

I voted for S. 496 even though I voted against the Lottery Referendum in November, 2000. The citizens of South Carolina were forced to go to the polls and vote on the Lottery without enabling legislation to let them know what they were voting for which was nothing but a political strategy by some members of this body in hopes of defeating the Lottery in the November election. That enabling


Printed Page 3233 . . . . . Thursday, May 3, 2001

legislation is H. 3307 and S. 496 that was debated attached to each other and for two days now.
The people of South Carolina still overwhelmingly voted for an Education Lottery in the November 2000 election without enabling legislation. At that time, I vowed to support the Will of the People regardless of the outcome of the election; which reflects my vote today a vote for the people voice. I strongly feel that when you ask the people to vote on an issue, then you better listen to what they say regardless of your personal position. This bill was also set for Special Order by the Rules Committee which I serve on and I voted in favor to set it for Special Order to carry out the Will of the People. This bill as amended does not carry out the Will of the People, but it is the best that we could get passed since some of the same members that were adamantly opposed to the Lottery obviously continue to set the Lottery up for failure, thereby not carrying out the Will of the People. Hopefully, the Senate serve the Will of the People in conference committee, since we have failed again to carry out the Will of the People today.
Rep. Jake Knotts

STATEMENT FOR THE JOURNAL

I voted against S. 496. The citizens of South Carolina were forced to go to the polls and vote on the Lottery without enabling legislation to let them know what they were voting for which was nothing but a political strategy by some members of this body in hopes of defeating the Lottery in the November election. That enabling legislation is H.3307 and S. 496 that was debated attached to each other and for two days now.
The people of South Carolina still overwhelmingly voted for an Education Lottery in the November 2000 election without enabling legislation. I strongly feel that when you ask the people to vote on an issue, then you better listen to what they say regardless of your personal position. This bill as amended does not carry out the Will of the People, and some of the same members that were adamantly opposed to the Lottery obviously continue to set the Lottery up for failure, thereby not carrying out the Will of the People. Hopefully, the Senate serve the Will of the People in conference committee, since we have failed again to carry out the Will of the People today.


Printed Page 3234 . . . . . Thursday, May 3, 2001

This bill makes a mockery of the will of the people. This is what people can expect from politicians. For this reason, I voted No on S. 496.
Rep. Mickey Whatley

STATEMENT FOR THE JOURNAL

I voted against S. 496 because it fails to honor the will of the majority of South Carolina voters. Last fall, over 700,000 people voted for a lottery that would provide South Carolinians with free tuition at technical colleges, scholarships for deserving students, and technology in our public schools. The lottery bill, as crafted by the House majority, fails to respect that vote.

The lottery the voters want would impact the lives of the broadest range of South Carolinians by providing free tuition for technical colleges and public two-year institutions and HOPE scholarships for students who have a B average. Free tuition at technical colleges would provide access to higher education for working people who need additional skills to be able to pursue the American Dream but don't have the resources to pay the tuition required. The HOPE scholarships would reward academic success and encourage South Carolina's brightest students to remain in-state for their higher education careers. Technology for public schools would enable our children to benefit from the ever-expanding world of technology.

The bill also dooms the lottery to failure because it rejects the basic model that makes the Georgia Lottery a success. Rather than adopting a business model, the House chose to mire the lottery in the bureaucratic maze of state government. Rather than operate free of political influence, it is subject to changing political whims. Rather than funding a clear set of priorities, the use of its proceeds will be debated annually with no protection from supplanting existing education funds.

This bill makes a mockery of the will of the people.

For this reason, I voted NO on S. 496.

Rep. James E. Smith, Jr.

H. 3307--RECONSIDERED, AMENDED AND ORDERED TO THIRD READING

The motion of Rep. BARRETT to reconsider the vote whereby the following Bill was rejected was taken up:

H. 3307 (Word version) -- Reps. Scott, Knotts, Jennings, Carnell, Govan, Whatley, Dantzler, Lee, Miller, Snow, Breeland, Hosey, Rutherford, J. E. Smith,


Printed Page 3235 . . . . . Thursday, May 3, 2001

Rivers, Weeks and Rhoad: A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 57 TO TITLE 33 SO AS TO ENACT THE "SOUTH CAROLINA EDUCATION LOTTERY ACT"; TO PROVIDE FOR A STATE LOTTERY AND TO CREATE THE SOUTH CAROLINA EDUCATION LOTTERY CORPORATION TO CONDUCT THE STATE LOTTERY; TO PROVIDE FOR THE CORPORATION'S BOARD MEMBERSHIP, DUTIES, AND POWERS; TO PROVIDE FOR THE CREATION OF A LOTTERY RETAILERS ADVISORY COMMITTEE; TO PROVIDE FOR THE METHOD OF CONTRACTING WITH VENDORS AND RETAILERS; TO PROVIDE FOR THE SALE OF LOTTERY GAME TICKETS AND THE DISTRIBUTION OF PRIZES; TO PROVIDE FOR ALLOCATION OF LOTTERY PROCEEDS WHICH MUST BE USED FOR EDUCATIONAL PURPOSES AND PROGRAMS; TO PROVIDE CRIMINAL PENALTIES FOR SELLING A LOTTERY TICKET TO A MINOR, PURCHASING A LOTTERY TICKET AS A MINOR, AND DEFRAUDING OR OTHERWISE TAMPERING WITH THE LOTTERY OR MAKING MATERIAL REPRESENTATIONS IN AN APPLICATION OR REPORT IN CONNECTION WITH THE LOTTERY; TO CREATE A SOUTH CAROLINA EDUCATION LOTTERY OVERSIGHT COMMITTEE; TO PROVIDE FOR SET-OFF DEBT COLLECTION FROM PRIZE WINNINGS; TO ESTABLISH THE SOUTH CAROLINA EDUCATION LOTTERY ACCOUNT INTO WHICH THE NET REVENUE RECEIVED FROM THE STATE EDUCATION LOTTERY MUST BE DEPOSITED AND TO PROVIDE APPROPRIATIONS FROM THE EDUCATION LOTTERY ACCOUNT BEGINNING IN FISCAL YEAR 2001-02 FOR SPECIFIED PURPOSES; AND TO AMEND SECTION 1-3-240, AS AMENDED, RELATING TO THE ENTITIES FROM WHICH AN APPOINTEE BY THE GOVERNOR MAY BE REMOVED IN CERTAIN CONDITIONS, SO AS TO ADD THE SOUTH CAROLINA EDUCATION LOTTERY CORPORATION TO THAT LIST OF ENTITIES.

Rep. J. E. SMITH moved to table the motion to reconsider.

Rep. J. E. SMITH demanded the yeas and nays which were taken, resulting as follows:

Yeas 46; Nays 68


Printed Page 3236 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allen                  Bales                  Battle
Bowers                 Breeland               Brown, J.
Brown, R.              Carnell                Clyburn
Cobb-Hunter            Coleman                Davenport
Emory                  Freeman                Gourdine
Govan                  Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Howard                 Jennings               Kennedy
Kirsh                  Lee                    Lloyd
Lourie                 Mack                   McLeod
Miller                 Moody-Lawrence         Neal, J.H.
Ott                    Parks                  Phillips
Rivers                 Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Snow                   Weeks                  Whipper
Wilder

Total--46

Those who voted in the negative are:

Allison                Altman                 Barrett
Bingham                Campsen                Cato
Chellis                Coates                 Cooper
Cotty                  Dantzler               Easterday
Edge                   Fleming                Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Hinson
Huggins                Keegan                 Kelley
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McGee                  Merrill
Owens                  Perry                  Quinn
Rhoad                  Rice                   Riser
Robinson               Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Smith, W.D.            Stille
Stuart                 Talley                 Taylor
Thompson               Townsend               Tripp

Printed Page 3237 . . . . . Thursday, May 3, 2001

Trotter                Vaughn                 Walker
Webb                   White                  Wilkins
Young, A.              Young, J.

Total--68

So, the House refused to table the motion to reconsider.

The question then recurred to the motion to reconsider.

Rep. J. E. SMITH demanded the yeas and nays which were taken, resulting as follows:

Yeas 69; Nays 49

Those who voted in the affirmative are:

Allison                Altman                 Barrett
Bingham                Brown, J.              Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Dantzler
Easterday              Edge                   Fleming
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Hinson                 Huggins                Keegan
Kelley                 Klauber                Knotts
Koon                   Law                    Leach
Limehouse              Littlejohn             Loftis
Lucas                  Martin                 McGee
Merrill                Owens                  Perry
Quinn                  Rhoad                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Stille                 Stuart                 Talley
Taylor                 Thompson               Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilkins                Young, A.              Young, J.

Total--69


Printed Page 3238 . . . . . Thursday, May 3, 2001

Those who voted in the negative are:
Allen                  Bales                  Battle
Bowers                 Breeland               Brown, R.
Carnell                Clyburn                Cobb-Hunter
Coleman                Davenport              Delleney
Emory                  Freeman                Gourdine
Govan                  Harvin                 Hayes
Hines, J.              Hines, M.              Hosey
Howard                 Jennings               Kennedy
Kirsh                  Lee                    Lloyd
Lourie                 Mack                   McCraw
McLeod                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Parks                  Phillips               Rivers
Rutherford             Scott                  Sheheen
Smith, F.N.            Smith, J.E.            Snow
Weeks                  Whatley                Whipper
Wilder

Total--49

So, the motion to reconsider was agreed to.

AMENDMENT NO. 48--RECONSIDERED AND ADOPTED

Rep. HARRELL moved to reconsider the vote whereby Amendment No. 48 was tabled.

Rep. RUTHERFORD moved to table the motion to reconsider.

Rep. SCOTT demanded the yeas and nays which were taken, resulting as follows:

Yeas 50; Nays 66

Those who voted in the affirmative are:

Allen                  Battle                 Bowers
Breeland               Brown, R.              Carnell
Clyburn                Cobb-Hunter            Coleman
Edge                   Emory                  Freeman
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.

Printed Page 3239 . . . . . Thursday, May 3, 2001

Hinson                 Hosey                  Howard
Jennings               Keegan                 Kelley
Kirsh                  Law                    Lee
Lloyd                  Lourie                 Mack
McLeod                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Parks                  Phillips               Rivers
Rutherford             Scott                  Sheheen
Smith, F.N.            Smith, J.E.            Snow
Thompson               Weeks                  Whatley
Whipper                Young, A.

Total--50

Those who voted in the negative are:

Allison                Altman                 Bales
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Dantzler
Davenport              Delleney               Easterday
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Huggins                Kennedy
Klauber                Knotts                 Koon
Leach                  Limehouse              Littlejohn
Loftis                 Lucas                  Martin
McCraw                 McGee                  Merrill
Owens                  Perry                  Quinn
Rhoad                  Rice                   Riser
Robinson               Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Stille                 Stuart
Talley                 Taylor                 Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilder                 Wilkins                Young, J.

Total--66


Printed Page 3240 . . . . . Thursday, May 3, 2001

So, the House refused to table the motion to reconsider.

The question then recurred to the motion to reconsider.

Rep. SCOTT demanded the yeas and nays which were taken, resulting as follows:

Yeas 67; Nays 50

Those who voted in the affirmative are:

Allison                Altman                 Bales
Barrett                Bingham                Campsen
Cato                   Coates                 Cooper
Cotty                  Davenport              Delleney
Easterday              Emory                  Fleming
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Huggins                Kennedy                Klauber
Knotts                 Koon                   Leach
Limehouse              Littlejohn             Loftis
Lucas                  Martin                 McCraw
McGee                  Neal, J.M.             Owens
Perry                  Quinn                  Rhoad
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough
Sharpe                 Sheheen                Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Smith, W.D.            Stille
Stuart                 Talley                 Taylor
Townsend               Tripp                  Trotter
Vaughn                 Walker                 Webb
White                  Wilder                 Wilkins
Young, J.

Total--67

Those who voted in the negative are:

Allen                  Battle                 Bowers
Breeland               Brown, R.              Carnell
Chellis                Clyburn                Cobb-Hunter
Coleman                Dantzler               Edge
Freeman                Gourdine               Govan

Printed Page 3241 . . . . . Thursday, May 3, 2001

Harvin                 Hayes                  Hines, J.
Hines, M.              Hinson                 Hosey
Howard                 Jennings               Keegan
Kelley                 Kirsh                  Law
Lee                    Lloyd                  Lourie
Mack                   McLeod                 Merrill
Miller                 Moody-Lawrence         Neal, J.H.
Ott                    Parks                  Phillips
Rivers                 Rutherford             Scott
Smith, F.N.            Smith, J.E.            Snow
Thompson               Weeks                  Whatley
Whipper                Young, A.

Total--50

So, the motion to reconsider was agreed to.

Rep. LEACH proposed the following Amendment No. 48 (Doc Name COUNCIL\SKB\AMEND\18457SOM01), which was adopted:
Amend the bill, as and if amended, in Section 59-150-20(7) as contained in SECTION 2 by adding after:
/ The operation of the lottery games excludes machines and lottery games, including video poker lottery games, prohibited by Sections 12-21-2710, 16-19-40, except a machine or device dispensing a lottery ticket, and 16-19-50. /
/ The operation of lottery games also excludes multi-state lottery promotions, including, but not limited to, power-ball games. /
Amend the bill further by striking Section 59-150-50(7) in its entirety and renumber items.
Amend the bill in Section 59-150-70 by deleting the fourth sentence which reads:
/ The only lottery games that may be played pursuant to these temporary regulations, policies, and procedure are instant tickets, dollar tickets, and dollar joint- or multi-state lottery games. / and inserting:
/ The only lottery games that may be played pursuant to these temporary regulations, policies, and procedures are instant tickets and dollar tickets. /
Amend the bill further by striking Section 59-150-230(C)(5) in its entirety and inserting:
/   (5)   A holder of a winning lottery game ticket or share from a lottery game must claim a cash prize within one hundred eighty days


Printed Page 3242 . . . . . Thursday, May 3, 2001

after the drawing in which the cash prize was won. In a South Carolina lottery game in which the player may determine instantly if he has won or lost, he must claim a cash prize within ninety days after the end of the lottery game. If a valid claim is not made for a cash prize within the applicable period, the cash prize is an unclaimed prize for purposes of this chapter. /
Renumber sections to conform.
Amend title to conform.

The question then recurred to the adoption of the amendment.

Rep. WEEKS moved to table the amendment.

Rep. WEEKS demanded the yeas and nays which were taken, resulting as follows:

Yeas 49; Nays 66

Those who voted in the affirmative are:

Allen                  Battle                 Bowers
Breeland               Brown, R.              Carnell
Chellis                Clyburn                Cobb-Hunter
Dantzler               Edge                   Emory
Freeman                Gourdine               Govan
Harvin                 Hayes                  Hines, J.
Hines, M.              Hinson                 Hosey
Howard                 Jennings               Keegan
Kelley                 Kennedy                Kirsh
Law                    Lee                    Lloyd
Lourie                 Mack                   McLeod
Merrill                Miller                 Moody-Lawrence
Ott                    Parks                  Rivers
Rutherford             Scott                  Smith, F.N.
Smith, J.E.            Snow                   Thompson
Weeks                  Whatley                Whipper
Young, A.

Total--49

Those who voted in the negative are:

Allison                Altman                 Bales
Barrett                Bingham                Campsen

Printed Page 3243 . . . . . Thursday, May 3, 2001

Cato                   Coates                 Cooper
Cotty                  Davenport              Delleney
Easterday              Fleming                Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Huggins
Klauber                Knotts                 Koon
Leach                  Limehouse              Littlejohn
Loftis                 Lucas                  Martin
McCraw                 McGee                  Neal, J.M.
Owens                  Perry                  Phillips
Quinn                  Rhoad                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Sheheen                Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Townsend
Tripp                  Trotter                Vaughn
Walker                 Webb                   White
Wilder                 Wilkins                Young, J.

Total--66

So, the House refused to table the amendment.

The question then recurred to the adoption of the amendment.

Rep. RUTHERFORD demanded the yeas and nays which were taken, resulting as follows:

Yeas 62; Nays 52

Those who voted in the affirmative are:

Allison                Altman                 Bales
Barrett                Bingham                Campsen
Cato                   Coates                 Cooper
Cotty                  Davenport              Delleney
Easterday              Fleming                Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Huggins
Klauber                Koon                   Leach
Littlejohn             Loftis                 Lucas

Printed Page 3244 . . . . . Thursday, May 3, 2001

Martin                 McGee                  Neal, J.M.
Owens                  Perry                  Phillips
Quinn                  Rhoad                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Sheheen                Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Stille                 Stuart                 Talley
Taylor                 Townsend               Tripp
Trotter                Vaughn                 Walker
Webb                   White                  Wilder
Wilkins                Young, J.

Total--62

Those who voted in the negative are:

Allen                  Battle                 Bowers
Breeland               Carnell                Chellis
Clyburn                Cobb-Hunter            Dantzler
Edge                   Emory                  Freeman
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.
Hinson                 Hosey                  Howard
Jennings               Keegan                 Kelley
Kennedy                Kirsh                  Knotts
Law                    Lee                    Limehouse
Lloyd                  Lourie                 Mack
McCraw                 McLeod                 Merrill
Miller                 Moody-Lawrence         Neal, J.H.
Ott                    Parks                  Rivers
Rutherford             Scott                  Smith, F.N.
Smith, J.E.            Snow                   Thompson
Weeks                  Whatley                Whipper
Young, A.

Total--52

So, the amendment was adopted.

Rep. KNOTTS moved that the House do now adjourn.


Printed Page 3245 . . . . . Thursday, May 3, 2001

Rep. HARRELL demanded the yeas and nays which were taken, resulting as follows:

Yeas 35; Nays 82

Those who voted in the affirmative are:

Allen                  Bales                  Battle
Bowers                 Breeland               Brown, R.
Clyburn                Cobb-Hunter            Coleman
Dantzler               Emory                  Govan
Harvin                 Hayes                  Hines, J.
Hines, M.              Hosey                  Howard
Jennings               Kennedy                Lee
Lloyd                  Lourie                 Mack
McLeod                 Moody-Lawrence         Neal, J.M.
Ott                    Parks                  Rivers
Rutherford             Scott                  Sheheen
Snow                   Weeks

Total--35

Those who voted in the negative are:

Allison                Altman                 Barrett
Bingham                Brown, J.              Campsen
Carnell                Cato                   Chellis
Coates                 Cooper                 Cotty
Davenport              Delleney               Easterday
Edge                   Fleming                Freeman
Frye                   Gilham                 Gourdine
Hamilton               Harrell                Harrison
Haskins                Hinson                 Huggins
Keegan                 Kelley                 Kirsh
Klauber                Knotts                 Koon
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McCraw                 McGee
Merrill                Miller                 Neal, J.H.
Owens                  Perry                  Phillips
Quinn                  Rhoad                  Rice
Riser                  Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, F.N.

Printed Page 3246 . . . . . Thursday, May 3, 2001

Smith, G.M.            Smith, J.E.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Thompson
Townsend               Tripp                  Trotter
Vaughn                 Walker                 Webb
Whatley                Whipper                White
Wilder                 Wilkins                Young, A.
Young, J.

Total--82

So, the House refused to adjourn.

AMENDMENT NO. 158--RECONSIDERED AND ADOPTED

Rep. HARRELL moved to reconsider the vote whereby Amendment No. 158 was tabled.

Rep. RUTHERFORD moved to table the motion to reconsider.

Rep. WALKER demanded the yeas and nays which were taken, resulting as follows:

Yeas 44; Nays 68

Those who voted in the affirmative are:

Allen                  Battle                 Bowers
Breeland               Brown, R.              Carnell
Clyburn                Cobb-Hunter            Coleman
Dantzler               Emory                  Freeman
Gourdine               Govan                  Hayes
Hines, J.              Hines, M.              Hinson
Hosey                  Howard                 Jennings
Kennedy                Law                    Lee
Lloyd                  Lourie                 Mack
McLeod                 Merrill                Miller
Moody-Lawrence         Neal, J.H.             Neal, J.M.
Ott                    Parks                  Rivers
Rutherford             Scott                  Sheheen

Printed Page 3247 . . . . . Thursday, May 3, 2001

Smith, F.N.            Smith, J.E.            Snow
Trotter                Weeks

Total--44

Those who voted in the negative are:

Allison                Altman                 Bales
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Davenport
Delleney               Easterday              Edge
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Huggins                Keegan
Kelley                 Klauber                Knotts
Koon                   Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McCraw                 McGee
Owens                  Perry                  Phillips
Quinn                  Rhoad                  Rice
Riser                  Robinson               Rodgers
Sandifer               Scarborough            Sharpe
Simrill                Sinclair               Smith, D.C.
Smith, G.M.            Smith, J.R.            Smith, W.D.
Stille                 Stuart                 Talley
Taylor                 Thompson               Townsend
Tripp                  Vaughn                 Walker
Webb                   White                  Wilkins
Young, A.              Young, J.

Total--68

So, the House refused to table the motion to reconsider.

The question then recurred to the motion to reconsider.

Rep. RUTHERFORD demanded the yeas and nays which were taken, resulting as follows:

Yeas 68; Nays 47


Printed Page 3248 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allison                Altman                 Bales
Barrett                Bingham                Campsen
Cato                   Chellis                Coates
Cooper                 Cotty                  Davenport
Delleney               Easterday              Edge
Fleming                Frye                   Gilham
Hamilton               Harrell                Harrison
Haskins                Huggins                Keegan
Kelley                 Klauber                Knotts
Koon                   Leach                  Limehouse
Littlejohn             Lucas                  Martin
McCraw                 McGee                  Owens
Perry                  Phillips               Quinn
Rhoad                  Rice                   Riser
Robinson               Rodgers                Sandifer
Scarborough            Sharpe                 Simrill
Sinclair               Smith, D.C.            Smith, G.M.
Smith, J.R.            Smith, W.D.            Stille
Stuart                 Talley                 Taylor
Thompson               Townsend               Tripp
Vaughn                 Walker                 Webb
White                  Wilder                 Wilkins
Young, A.              Young, J.

Total--68

Those who voted in the negative are:

Allen                  Battle                 Bowers
Breeland               Brown, R.              Carnell
Clyburn                Cobb-Hunter            Coleman
Dantzler               Emory                  Freeman
Gourdine               Govan                  Harvin
Hayes                  Hines, J.              Hines, M.
Hinson                 Hosey                  Howard
Jennings               Kennedy                Law
Lee                    Lloyd                  Lourie
Mack                   McLeod                 Merrill
Miller                 Moody-Lawrence         Neal, J.H.
Neal, J.M.             Ott                    Parks
Rivers                 Rutherford             Scott

Printed Page 3249 . . . . . Thursday, May 3, 2001

Sheheen                Smith, F.N.            Smith, J.E.
Snow                   Trotter                Weeks
Whatley                Whipper

Total--47

So, the motion to reconsider was agreed to.

Rep. WALKER proposed the following Amendment No. 158 (Doc Name COUNCIL\NBD\AMEND\11636AC01), which was adopted:
Amend the bill, as and if amended, in Section 59-150-350(C) of the 1976 Code, as contained in SECTION 2, by striking all after the third sentence in the subsection and inserting: / Funds made available from the Education Lottery Account may not exceed the previous year's net proceeds and investment earnings as certified by the Comptroller General. Not less than forty-five percent of such proceeds in any year shall be used for higher education purposes in this State and not less than forty-five percent used for K-12 purposes. Any remaining proceeds must be used for the higher education purposes or the K-12 purposes or both that are permitted by this section as the General Assembly shall provide in a separate appropriations bill. The higher education portion in any year shall be used to provide Palmetto Fellows Scholarships to all eligible applicants and then used to provide LIFE Scholarships for eligible resident students attending two-year or four-year public institutions or technical colleges in those amounts provided by law. The K-12 portion in any year shall be split into two parts with the first part used to provide youth education scholarships of up to and not to exceed one thousand dollars, to be determined in the annual general appropriations act, to resident parents of a four-year-old who attains the age of four years by September first of the school year the scholarship is received and who attends a public or private, for profit or nonprofit kindergarten, preschool, or child development center program provided in this State. The scholarship is payable from the lottery proceeds through the Department of Education directly to the school in the name of the attending child.
The remaining part of the K-12 funds shall be allocated equally between providing public school facility support and the maintenance and acquisition of school buses as the General Assembly shall provide by law upon fully funding the above listed items, remaining revenues shall be used for elementary and secondary public education as determined pursuant to the Education Accountability Act of 1998 and


Printed Page 3250 . . . . . Thursday, May 3, 2001

education improvement legislation enacted into law after the effective date of this chapter, new programs enacted by the General Assembly for public institutions of higher learning, including public four-year colleges and universities and their branches and two-year colleges, as defined in Section 59-103-5, and state technical schools, which programs may include the creation of endowed chairs at the state's universities, with an emphasis in the areas of, but not limited to, engineering, computer science, and the sciences in a separate appropriations act. The proportion of total recurring general fund and special fund revenues of the State expended for the total of public elementary, secondary, and higher education allocations in any fiscal year may not be less than the proportions in the fiscal year immediately before the fiscal year in which education revenues are first received from a state lottery, and may not be reduced or supplanted later by revenues received from a state lottery.
Renumber sections to conform.
Amend totals and title to conform.

The question then recurred to the adoption of the amendment.

Rep. KENNEDY demanded the yeas and nays which were taken, resulting as follows:

Yeas 69; Nays 45

Those who voted in the affirmative are:

Allison                Altman                 Bales
Barrett                Bingham                Brown, J.
Campsen                Cato                   Chellis
Coates                 Cooper                 Cotty
Davenport              Delleney               Easterday
Edge                   Fleming                Frye
Gilham                 Hamilton               Harrell
Harrison               Haskins                Keegan
Kelley                 Klauber                Knotts
Koon                   Leach                  Limehouse
Littlejohn             Loftis                 Lourie
Lucas                  Martin                 McCraw
McGee                  Owens                  Perry
Phillips               Quinn                  Rhoad
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough

Printed Page 3251 . . . . . Thursday, May 3, 2001

Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Taylor                 Townsend               Tripp
Trotter                Vaughn                 Walker
Webb                   White                  Wilder
Wilkins                Young, A.              Young, J.

Total--69

Those who voted in the negative are:

Allen                  Battle                 Bowers
Brown, R.              Carnell                Clyburn
Cobb-Hunter            Coleman                Dantzler
Emory                  Freeman                Gourdine
Govan                  Harvin                 Hayes
Hines, J.              Hines, M.              Hinson
Hosey                  Howard                 Huggins
Jennings               Kennedy                Law
Lee                    Lloyd                  Mack
McLeod                 Merrill                Miller
Moody-Lawrence         Ott                    Parks
Rivers                 Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Snow                   Talley                 Thompson
Weeks                  Whatley                Whipper

Total--45

So, the amendment was adopted.

Rep. LOURIE spoke against the Bill.

The question then recurred to the passage of the Bill, as amended, on second reading.

Rep. J. E. SMITH demanded the yeas and nays which were taken, resulting as follows:

Yeas 64; Nays 53


Printed Page 3252 . . . . . Thursday, May 3, 2001

Those who voted in the affirmative are:
Allison                Altman                 Bingham
Brown, J.              Campsen                Chellis
Coates                 Cotty                  Dantzler
Easterday              Edge                   Fleming
Frye                   Gilham                 Hamilton
Harrell                Harrison               Haskins
Hinson                 Huggins                Keegan
Kelley                 Klauber                Knotts
Law                    Leach                  Limehouse
Littlejohn             Loftis                 Lucas
Martin                 McGee                  Merrill
Owens                  Perry                  Quinn
Rice                   Riser                  Robinson
Rodgers                Sandifer               Scarborough
Sharpe                 Simrill                Sinclair
Smith, D.C.            Smith, G.M.            Smith, J.R.
Smith, W.D.            Stille                 Stuart
Talley                 Taylor                 Thompson
Townsend               Tripp                  Trotter
Walker                 Webb                   White
Wilder                 Wilkins                Young, A.
Young, J.

Total--64

Those who voted in the negative are:

Allen                  Bales                  Barrett
Battle                 Bowers                 Breeland
Brown, R.              Carnell                Clyburn
Cobb-Hunter            Coleman                Cooper
Davenport              Delleney               Emory
Freeman                Gourdine               Govan
Harvin                 Hayes                  Hines, J.
Hines, M.              Hosey                  Howard
Jennings               Kennedy                Kirsh
Koon                   Lee                    Lloyd
Lourie                 Mack                   McCraw
McLeod                 Miller                 Moody-Lawrence
Neal, J.H.             Neal, J.M.             Ott
Parks                  Phillips               Rhoad

Printed Page 3253 . . . . . Thursday, May 3, 2001

Rivers                 Rutherford             Scott
Sheheen                Smith, F.N.            Smith, J.E.
Snow                   Vaughn                 Weeks
Whatley                Whipper

Total--53

So, the Bill, as amended, was read the second time and ordered to third reading.

RECORD FOR VOTING

With the passage of S. 496 I felt it necessary to support this bill to afford better regulations of an expected lottery and to deter a line item veto that might occur should a single bill be considered an appropriation bill.

Rep. Dwight Loftis

Rep. KENNEDY moved that the House do now adjourn, which was agreed to.

RETURNED WITH CONCURRENCE

The Senate returned to the House with concurrence the following:

H. 3930 (Word version) -- Reps. Carnell, Rhoad, Robinson, Limehouse, Stuart, Martin, Weeks, Whatley, Allen, Allison, Altman, Askins, Bales, Barfield, Barrett, Battle, Bingham, Bowers, Breeland, G. Brown, J. Brown, R. Brown, Campsen, Cato, Chellis, Clyburn, Coates, Cobb-Hunter, Coleman, Cooper, Cotty, Dantzler, Davenport, Delleney, Easterday, Edge, Emory, Fleming, Freeman, Frye, Gilham, Gourdine, Govan, Hamilton, Harrell, Harrison, Harvin, Haskins, Hayes, J. Hines, M. Hines, Hinson, Hosey, Howard, Huggins, Jennings, Keegan, Kelley, Kennedy, Kirsh, Klauber, Knotts, Koon, Law, Leach, Lee, Littlejohn, Lloyd, Loftis, Lourie, Lucas, Mack, McCraw, McGee, McLeod, Meacham-Richardson, Merrill, Miller, Moody-Lawrence, J. H. Neal, J. M. Neal, Neilson, Ott, Owens, Parks, Perry, Phillips, Quinn, Rice, Riser, Rivers, Rodgers, Rutherford, Sandifer, Scarborough, Scott, Sharpe, Sheheen, Simrill, Sinclair, D. C. Smith, F. N. Smith, G. M. Smith, J. E. Smith, J. R. Smith, W. D. Smith, Snow, Stille, Talley, Taylor, Thompson, Townsend, Tripp, Trotter, Vaughn, Walker, Webb, Whipper, White, Wilder, Wilkins, Witherspoon, A. Young and J. Young: A CONCURRENT RESOLUTION TO


Printed Page 3254 . . . . . Thursday, May 3, 2001

COMMEND THE SOUTH CAROLINA DEPARTMENT OF TRANSPORTATION (SCDOT), THE TRANSPORTATION COMMISSION, AND EXECUTIVE DIRECTOR, ELIZABETH S. MABRY, FOR TAKING ACTION TO MEET THE TRANSPORTATION NEEDS OF THE STATE, AND FOR BEING NATIONALLY RECOGNIZED FOR EFFICIENCY AND PRODUCTIVITY DESPITE BEING THE LOWEST FUNDED HIGHWAY DEPARTMENT IN THE NATION.

H. 4057 (Word version) -- Rep. Fleming: A CONCURRENT RESOLUTION TO COMMEND THE UNION HIGH SCHOOL "YELLOW JACKETS" FOOTBALL TEAM ON A TREMENDOUS SEASON OF SPIRITED COMPETITION AND CONGRATULATE THE "YELLOW JACKETS" ON WINNING THE 2000 SOUTH CAROLINA STATE CLASS AAA FOOTBALL CHAMPIONSHIP AND THEIR SECOND CONSECUTIVE STATE FOOTBALL CHAMPIONSHIP.

H. 4066 (Word version) -- Reps. Stuart, Harrison and Allison: A CONCURRENT RESOLUTION TO COMMEND DONALD C. CAPPS OF COLUMBIA, PRESIDENT EMERITUS OF THE NATIONAL FEDERATION OF THE BLIND OF SOUTH CAROLINA, FOR THE INVALUABLE CONTRIBUTIONS HE HAS MADE OVER THE LAST FORTY-FIVE YEARS IN AIDING THE BLIND CITIZENS OF SOUTH CAROLINA AND THE NATION, AND TO CONGRATULATE HIM ON RECEIVING AN HONORARY DOCTOR OF LETTERS FROM USC SPARTANBURG.

ADJOURNMENT

At 5:00 p.m. the House, in accordance with the motion of Rep. BARFIELD, adjourned in memory of Stephen Kendal Shelly, to meet at 10:00 a.m. tomorrow.

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